Can I sell my SMSF property when I retire?

Can I sell my SMSF property when I retire?

Understanding the Possibility of Selling SMSF Property Upon Retirement


Many Australians invest in Self-Managed Superannuation Funds (SMSFs) to secure their retirement and build wealth for the future. One of the key advantages of SMSFs is the ability to invest in property, which can offer significant long-term benefits. However, as retirement approaches, SMSF members often wonder whether they can sell their SMSF property and access the proceeds. In this article, we will explore the rules and considerations surrounding selling SMSF property when approaching retirement. Can I sell my SMSF property when I retire?

The Basics of SMSFs and Property Investment

What is an SMSF?

A Self-Managed Superannuation Fund (SMSF) is a private superannuation fund structure that allows its members to manage their own retirement savings. SMSFs can have up to four members, all of whom act as trustees, giving them more control over their investment decisions compared to traditional superannuation funds.

Investing in Property through SMSFs

One of the main attractions of SMSFs is the ability to invest in property. SMSF members can purchase residential or commercial properties using the fund’s assets, allowing them to diversify their investment portfolio and potentially benefit from the property market’s growth.

Retirement and SMSF Property

Age and Preservation Rules

Before considering the possibility of selling an SMSF property, it is essential to understand the age and preservation rules that apply to superannuation funds. In Australia, the preservation age is currently between 55 and 60, depending on the individual’s birth year. When a member reaches their preservation age and retires, they can access their superannuation benefits.

Can I sell my SMSF property when I retire?
Can I sell my SMSF property when I retire?

Retirement Conditions of Release

To access SMSF benefits, the member must meet one of the conditions of release set by the Australian Taxation Office (ATO). The most common condition of release is retirement, which allows a member to access their superannuation in full or as a pension.

Can I Sell My SMSF Property When I Retire?

The Sale of SMSF Property upon Retirement

Yes, it is possible to sell SMSF property when you retire. Once a member meets a condition of release, such as retirement, they gain the ability to sell their SMSF property and access the proceeds.

Factors to Consider

Before proceeding with the sale, SMSF members should consider the following factors:

1. Age and Preservation Rules

As mentioned earlier, the preservation age plays a crucial role in accessing superannuation benefits. If you plan to sell the SMSF property before reaching your preservation age, you might be subject to severe tax implications, and accessing the funds may not be possible.

2. Capital Gains Tax (CGT)

Selling an investment property, whether through an SMSF or personally, can trigger Capital Gains Tax (CGT). However, there are specific concessions available for SMSFs, such as the CGT relief for assets owned for at least 12 months. It is essential to seek professional advice to understand the tax implications of selling your SMSF property.

3. Fund Liquidity and Diversification

Selling an SMSF property can significantly impact the fund’s liquidity and diversification. If the fund’s major asset is the property, selling it may leave the SMSF with a substantial cash balance. Diversifying the fund’s investments can help spread risk and improve overall financial stability.

SMSF property when I retire

4. Superannuation Balance and Retirement Goals

Consider your superannuation balance and how it aligns with your retirement goals. Selling the SMSF property may be necessary to fund your retirement lifestyle or to use the proceeds to invest in other income-generating assets.

The Process of Selling SMSF Property

1. Obtain a Property Valuation

Before listing the SMSF property for sale, it is essential to obtain a professional valuation to determine its current market value. The valuation is necessary for complying with SMSF regulations and ensuring a fair transaction between related parties.

2. Comply with SMSF Regulations

Selling an SMSF property involves compliance with specific regulations to avoid any breaches. It is crucial to engage a qualified SMSF auditor or accountant to guide you through the process and ensure all legal requirements are met. For smsf compliance services read on.

3. Consider the Selling Method

Decide whether you want to sell the SMSF property through private treaty, auction, or expressions of interest. Each method has its pros and cons, so it’s essential to weigh them against your specific circumstances and the current property market conditions.

4. Transfer of Property Ownership

After selling the SMSF property, the ownership must be transferred correctly. Ensure that the necessary legal documentation is completed, and the sale proceeds are deposited back into the SMSF’s bank account.

Alternatives to Selling SMSF Property

1. Renting out the Property

Instead of selling the SMSF property, retirees may choose to rent it out to generate rental income. Renting the property can be a steady source of cash flow during retirement and allows the potential for capital appreciation.

2. Transition to Retirement (TTR) Strategy

A Transition to Retirement (TTR) strategy allows SMSF members to access some of their superannuation benefits while continuing to work. By implementing a TTR strategy, members can supplement their income without selling the SMSF property.

3. Downsizing and Contributing to Super

Retirees may consider downsizing their primary residence and contributing the proceeds to their SMSF. The downsizer contribution scheme allows individuals aged 65 and above to contribute up to $300,000 per person from the sale of their main residence to their superannuation.


As retirement approaches, SMSF members have the option to sell their SMSF property and access the proceeds to support their retirement lifestyle. However, it is essential to consider factors such as age and preservation rules, CGT implications, fund liquidity, and retirement goals before making any decisions. Engaging professional advice is crucial to ensure compliance with SMSF regulations and to make informed choices regarding the sale or retention of the SMSF property.

Remember that everyone’s financial situation is unique, so consult with a qualified financial advisor or SMSF specialist who can help tailor a strategy that best fits your retirement goals and SMSF objectives. With proper planning and careful consideration, selling an SMSF property can be a valuable step towards securing a comfortable retirement.

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