Capital gains: Reducing tax via super contributions

Q: I have a self-managed super fund (SMSF) and I also have two investment properties in my personal name. When I sell the properties, I will be required to pay capital gains tax. Can this capital gains tax be offset by a contribution to the SMSF which would be tax-deductible? Would there be a 15% contributions tax? I am 60 years of age, but not retired.

Trish’s response: Reducing the amount of income tax payable, including income tax payable on net capital gains, by making concessional (tax-deductible or salary sacrificed) super contributions remains a popular strategy.

Concessional contributions will be subject to 15 per cent tax when entering the fund. Note that the annual limit for concessional contributions is $50,000 for anyone aged 50 or over for the 2011/2012 year. The contributions cap is $25,000 (for the 2011/2012 year) for anyone under 50 years of age. For the 2012/2013 year onwards, the Government intends to continue the special over-50s concessional contributions cap for those Australians who hold less than $500,000 in super. I explain this proposed change in the article Super contributions: What’s going on with the over-50s concessional cap?

Note: A self-employed or non-employed individual can only claim deductions for super contributions against assessable income, such as salary, investment income and capital gains. For employees, entering a salary sacrifice arrangement (making before-tax contributions to a super fund pursuant to an arrangement with an employer) is another popular strategy used to reduce an individual’s taxable income. Superannuation Guarantee contributions are treated as concessional contributions.

IMPORTANT: SuperGuide does not provide financial advice. SuperGuide does not answer all questions posted in the comments section. SuperGuide may use your question or comment, or use questions from several readers, as the basis for an article topic that we publish on the SuperGuide website. We will not disclose names or personal information in these articles. Comments provided by readers that may include information relating to tax, superannuation or other rules cannot be relied upon as advice. SuperGuide does not verify the information provided within comments from readers. Readers need to seek independent advice about their personal circumstances.


  1. I have two investment properties I propose to sell in near future (after I retire) – my question is how can I mimimise the capital gains tax I have to pay ?

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