Capital gains tax isn’t the enemy 🤑
Written by Glen James
Host of the Retire Right & money money money (formerly my millennial money) podcasts & author of The Quick-Start Guide to Investing.
I’ve noticed a lot of chatter in the Facebook group lately about the so-called big bad wolf—Capital Gains Tax (CGT)—especially when it comes to investment properties. Most of the discussion seems to be about how to avoid it completely… which, I hate to break it to you, is actually tax evasion 🚓
Now, I like you all too much to see you end up in hot water, so let’s set the record straight: CGT isn’t the enemy. It’s a known standard part of investing—not a punishment for building wealth. I’m a property investor, just like you, and this is part of the investing journey that I know is coming, so I’ve made a plan. Some things to know:
1. If you’re paying CGT, you’ve made money—congrats!
Look at you go, investor! Too many people panic about CGT when selling an investment property, but remember: you only pay it because you made a profit. If you sell and walk away with a gain, a portion of that is taxed—but the rest is yours to keep. That’s a win.
2. You may be able to reduce it, but you can’t magically avoid it
Your accountant is such a helpful planning and assessment resource when it comes to CGT. If you own an investment property or are planning on selling one, you need to talk with your accountant asap. There are legitimate ways to reduce CGT, and it’s worth asking your accountant about:
✅the 6-year absence rule
✅the best timing of your sale to reduce tax
✅eligibility for a 50% discount if you’ve owned the property in your personal name for at least 12 months
Concessions and discounts do exist, but you don’t know if you’re eligible until you speak with your accountant.
3. The family home is (usually) your CGT-free haven
Your primary residence is generally CGT-free (there are some stipulations). But if you’ve been renting it out at some stage, or subdividing the backyard, there might be CGT to pay. Know the rules before making big moves.
At the end of the day, CGT is just a cost of doing business. If you’ve made solid investments, you’re still ahead. Plan for it, factor it into your decisions, and don’t let it stop you from living your best retirement. Your best line of defence is in partnering with an accountant, and running the numbers.
Martin and I chatted about this topic and more on a recent episode, have a listen:
🎙️305 avoiding CGT on property? accessing super while still working, growth or defensive in retirement + more (Spotify | Apple Podcasts)
If property investing is something you’re keen to learn more about, check out Sort Your Property Out & Build Your Future written by our property podcast host, John Pidgeon. He unpacks the investing journey, touching on tax issues like CGT. Grab a copy here:
Community question
Community member says: There are events in the news every day that make me wonder if I should change the way my superannuation is invested. I’m worried there’ll be another crash like the GFC. Should I be concerned? Should I make changes to my superannuation?
Glen says: There is a lot going on in the world right now. And with the technology we all enjoy it seems to be a constant feed of imagery and news stories. If you weren’t feeling anxious, curious or concerned by it all you would likely be in the minority!
This question about markets crashing has come up in our community many times. I love this question. I was working in financial advice during the GFC and saw firsthand how people reacted when markets crashed. Some stuck to their plan, while others panicked, moved their super to cash, and missed out on the recovery—costing them thousands in potential returns.
Market ups and downs are normal, but the biggest mistake people make is reacting out of fear instead of strategy. If your super is well-diversified, it’s designed to handle market fluctuations. Even when share prices drop, investments continue to generate income.
Rather than making impulsive changes, focus on understanding your investment mix and having a plan. And if you’re really unsure, getting financial advice can help you stay on track and avoid costly mistakes. The key is to stay informed, have a plan, and avoid knee-jerk reactions. I’ve written a blog about fears of another GFC, have a read:
