Should I sell my $1m investment property and put it into my super?

OpinionMoney columnistAugust 26, 2026 — 5:01amI’m a young retiree at 61 years. I have a $500,000 share portfolio and a 20-year-held investment property worth $1 million. I’m of a mind to sell the property and realise the share portfolio over the next four years, and slowly use concessional contributions to the maximum to get the money into a good super fund.I wonder if I’m putting all my eggs into one basket, so to speak. However, I feel simplicity moving forward in retirement is good. The amount in super should provide a perpetual retirement income, as we intend to take the minimum government limits, i.e. 4 per cent, 5 per cent, etc. What are your thoughts on such a simplification?Topping up your super can be a great way to bolster your retirement savings.Simon LetchFinally, you mentioned the downsizer contribution of $300,000 into super. If you’re already at your cap, i.e. $1.9 million for myself, I take it the $300,000 has to sit in the accumulation bucket and thus have gains taxed. Is this correct?You’ve held the investment property for a long time, so the decision about selling it sooner rather than later should be based primarily on its future potential, not on how long you have owned it.But I do think money invested in a good super fund should outperform a 20-year-old investment property, particularly once you consider the costs and hassles that come with owning property.I also don’t see why you need to leave all the proceeds in accumulation mode. It would seem you have plenty of room to contribute money to super and then transfer it to pension mode, where the earnings will be tax-free.Shares acquired before September 1985 will lose their CGT-free status on June 30, 2027.As for investing part of the portfolio more aggressively in international shares, there is nothing wrong with that in principle. The important point is that super is merely the structure – you can still have a well-diversified portfolio inside it. Moving your investments into super does not mean putting all your eggs into one investment basket.As far as the downsizer contribution is concerned, the limit is $300,000 per person, which means a couple may be able to put $600,000 into super, irrespective of age or the amount already in super.There is no requirement that a downsizer contribution must stay in accumulation mode. The transfer balance cap is now $2.1 million, so provided you have sufficient personal transfer balance cap available, you may have plenty of space to move more of your super into pension mode.You have mentioned several times that the “old” capital gains tax regime of a 50 per cent discount will apply for pensioners and others in receipt of government assistance rather than the new laws. Does this apply only to shares purchased before July 1, 2027 and will new shares or dividend reinvestments purchased after July 1, 2027 be subject to the new capital gains rules?As I understand it, cost base indexation will apply to determine the amount of CGT for gains that accrue from July 1, 2027, however, anyone who receives at least $1 of government income support in the year the asset is sold won’t be subject to a minimum tax rate of 30 per cent.Shares you own now and liquidated before June 30, 2027 will be subject to the existing CGT rules with the 50 per cent discount applying. If sold after that date, the profit will be split between pre-June 30, 2027 and post-June 30, 2027 gains. The value of the shares at June 30, 2027 will be indexed, with a calculation of CGT on the shares after that date.I have $1.3 million in mainly bank shares returning about $55,000 in reinvested dividends. After June 30, 2027, if I take the dividends as cash payments, am I right in assuming the existing shares will retain the 50 per cent discount until my death?That is not correct. You will need to record the balance of your shares on June 30, 2027. Any shares sold after that date will be given a notional indexed cost base to ensure that any gain from June 30, 2027 to the date of your sale are taxed after adjustment for inflation. All shares sold before June 30, 2027 will get the 50 per cent discount.I bought and have retained shares in two ASX-listed blue-chip companies in the period between 1974 and September 20, 1985, when the CGT was introduced, and more after that latter date. Do the recent changes to the CGT rules apply to all of these shares, or will the shares I acquired before the introduction of the CGT remain exempt from the CGT when I sell them?Shares acquired before September 1985 will lose their CGT-free status on June 30, 2027 – the cost base for CGT purposes going forward will be their market value at that date.When I was 18 – I’m now 59 – I read your book Making Money Made Simple, and I am now wealthy. I have saturated my super and, as I am on the highest marginal tax rate, have been looking at investment bonds. However, I have read that for some people it may be better simply to invest in an exchange-traded fund (ETF) because the costs are lower. I would welcome your comments on this and wonder whether you have done any modelling comparing the two alternatives.Think of investment bonds as an alternative to super, but with some similar characteristics. They are both tax-paid investments, which means there is nothing to include on your annual tax return until you cash them in. Unlike super, there is no limit on the amount you can invest in investment bonds, and there is no lack of access, as you can cash them in at any time.The tax in a super fund will be zero or 15 per cent, depending on whether the balance is in pension mode or accumulation mode, whereas investment bonds pay a maximum tax rate of 30 per cent.If you hold the bond for 10 years, the entire proceeds can be redeemed tax-free. A bonus is that you are allowed to contribute up to 125 per cent of the previous year’s investment without restarting the 10-year period.If you redeem the bond before eight years is up, the profit is fully taxable, less a 30 per cent rebate to compensate you for the tax already paid by the bond fund. The management fees may be slightly higher in an investment bond than in a share-based ETF.But don’t let fees become the tail that wags the dog. You are in the 47 per cent tax bracket, so the real comparison is not simply the fees on an ETF versus the fees on an investment bond. It is the after-tax return from each.The bond keeps the tax rate at a maximum of 30 per cent and, given you have many years ahead of you, you can take a long-term view and redeem the entire proceeds after 10 years tax-free. In your situation, I think that is a major advantage.Noel Whittaker is the author of Retirement Made Simple and other books on personal finance. Email: noel@noelwhittaker.com.auAdvice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.Expert tips on how to save, invest and make the most of your money delivered to your inbox every Sunday. Sign up for our Real Money newsletter.Noel Whittaker, AM, is the author of Making Money Made Simple and numerous other books on personal finance.Connect via X or email.From our partners