When Do We Sell Our Investment Properties — Retirement Edition – Guidance Financial Services

For many Australians approaching retirement, investment property has been a faithful long-term strategy. It’s familiar. It’s tangible. It’s helped build wealth over decades. 

But as you step into retirement—when superannuation becomes accessible, income generation takes on an increased focus, and lifestyle becomes the priority – it’s time to think about whether an investment property or properties continue to make sense. 

Thanks for listening to another episode of the Financial Autonomy podcast. Let’s dive into this week’s episode –  

Should I sell my investment property? 

We spend so much time thinking about when to buy property, but very little time thinking about when — or whether — to sell. And yet the decision to sell, especially around retirement, can have a major impact on your long-term financial security, income stability, and lifestyle flexibility. 

Retirement transforms your financial priorities. Your income changes shape, and your time horizon shifts. Decisions are no longer about maximising long-term growth — they’re about ensuring safety, stability, simplicity, and adequate income. 

Here’s what typically changes: 

• Your income becomes largely fixed (super pension, annuity, maybe part Age Pension). 

• Liquidity becomes more important than illiquid growth assets. 

• Cashflow reliability matters far more than potential future capital gains. 

• You may prefer to simplify life and reduce financial admin. 

• Estate planning considerations become more prominent. 

• The buffer of salary — helpful for absorbing property costs — disappears. 

An investment property that was perfect in your 40s or 50s might no longer be the best fit once you enter retirement. 

The Key Reasons Retirees Consider Selling 

If you’re weighing up whether to sell, these are the most common (and most compelling) reasons retirees make the shift. 

1. Boost Super 

Once retired your superannuation savings convert into an income stream with the income being tax free provided you are within the transfer balance cap. It’s tough to imagine a better tax circumstance then 0%. Given the generosity of our superannuation system at this phase of life, it’s sensible to endeavour to use it to the maximum extent possible. The current transfer balance cap is $2,000,000 per person, so the optimal position to get yourself into is to have a superannuation balance around this level. If selling an investment property will help you get there, this may well be an attractive strategy option. 

2. Improving Cashflow 

Investment properties can become more of a cashflow burden as you move into retirement: 

• Repairs and maintenance grow more frequent as the building ages. 

• Insurance and body corporate fees (if applicable) often rise. 

• Land tax can be significant, depending on the state. 

• Rental increases don’t always keep up with inflation or interest rates. 

When you’re working, you can absorb the occasional unexpected cost. In retirement, these spikes can cause real stress. Selling can take pressure off your cashflow and create a more predictable financial future. 

3. Reducing Complexity and Stress 

Retirement is a time to simplify. Owning an investment property means: 

• Dealing with compliance issues 

• Responding to tenants’ needs 

For some, this involvement is enjoyable. For many others, it becomes a burden — especially if health, travel, or lifestyle priorities change. Selling can free up time and mental energy. 

4. An Optimal time to trigger a Capital Gain 

Hopefully your time as a property investor has proven successful, and the value of your investment has grown. Whilst you hold the asset there has been no tax to pay on this growth, however at the point of sale, capital gains tax will become assessable. You therefore have control as to the timing of this capital gains tax liability, by virtue of your timing around the decision to sell.  

As mentioned earlier, income generated by superannuation once in retirement is tax free, so triggering a capital gain event once you are fully retired means the taxable income is added to little if any other income, providing you with access to the full tax free threshold, and the normal marginal tax rate ladder. In this way the amount of tax you will pay on the capital gain on your property is minimised by timing the sale to occur post retirement. 

A Framework for Deciding Whether to Sell 

Here are five practical questions to help guide your thinking: 

1. Is the property helping me live the retirement lifestyle I want? 

If the property adds stress or restricts travel, flexibility, or peace of mind, perhaps it time to part with it. 

2. Is the property cashflow positive after all real costs? 

If it’s costing you money or barely breaking even, it’s not appropriate in retirement. 

3. Is keeping this property stopping me from taking advantage of better opportunities? 

For example: 

• Increasing your super balance 

• Building a liquid emergency fund 

• Simplifying your estate planning 

• Spending more on travel whilst fit and able 

If the property restricts your options, it might be time to reassess. 

Where to Reallocate the Sale Proceeds 

Smart options include: 

• Boosting super (NCCs, bring-forward rule) 

• Building a diversified portfolio outside super 

• Creating a cash buffer for health, travel, or emergencies 

• Clearing debts – most people would prefer to be debt free in retirement 

• Travel or hobbies – maximising the enjoyment of your retirement 

• Early inheritance gifts 

The aim is to align your assets with the lifestyle you want. 

Final Thoughts 

For most people, selling investment properties once retired is a sensible strategic shift. It’s about ensuring your assets are arranged in a way that supports your next 20 or 30 years of life. 

Retirement should be a time of freedom, flexibility, and confidence. And sometimes, that means acknowledging that the property that served you so well on the journey, may not be the right companion for the destination.