Superannuation, tax planning and retirement living decisions can have a significant impact on your long-term financial security. In this edition, we explore whether salary sacrifice remains an effective strategy following the 1 July 2026 changes, how the small business CGT concessions can help preserve more wealth when exiting a business, and why understanding the financial structure of a retirement village is essential before signing a contract. Taking the time to understand these opportunities can help you make better-informed decisions for your retirement journey.
Salary Sacrifice After 1 July 2026: Still Worth Doing?
The 1 July 2026 superannuation and tax changes have altered the value of salary sacrifice for some Australians, particularly lower-income earners. Salary sacrifice continues to deliver significant tax advantages for many middle and higher-income workers who are building retirement savings. Personal deductible contributions have become an increasingly flexible alternative, especially for people with irregular income or year-end planning opportunities. Pre-retirees should also review any unused carry-forward contribution caps, as these can provide substantial opportunities to boost superannuation while reducing tax.
Small Business CGT Concessions: Retiring From Your Business Tax-Effectively
The small business CGT concessions can significantly reduce or eliminate tax when eligible business owners sell business assets as part of their retirement strategy. Access to these concessions depends on meeting specific business, asset and ownership eligibility requirements before a sale occurs. The most valuable concession is often the 15-year exemption, which can completely remove capital gains tax on qualifying assets. When combined with CGT cap contributions to superannuation, these concessions can help convert business wealth into retirement savings in a highly tax-effective manner.
Retirement Villages: What You’re Really Buying
Retirement villages offer community, lifestyle benefits and support services, but the financial arrangements differ significantly from a traditional property purchase. Many residents purchase a right to occupy rather than owning the property outright, making the contract structure particularly important. Deferred management fees, capital gain arrangements and exit payment rules can substantially affect the overall cost of the arrangement. Understanding these features before signing a contract helps retirees make informed decisions that align with their financial goals and expected length of stay.
Q & A
- How does a deferred management fee work in a retirement village?
Deferred management fees accrue over time and can significantly affect the overall cost of retirement village living depending on your length of stay.
- How do the small business CGT concessions work?
Eligible business owners may be able to reduce, defer or eliminate capital gains tax and make valuable superannuation contributions when selling a business.
- Can I catch up on unused super contribution caps?
Eligible Australians may use unused concessional contribution caps from the previous five years if they meet the required balance limits.
