One in two older investors consider selling shares before CGT changes, survey finds

Older investors are considering selling assets before proposed capital gains tax changes take effect, with a survey heavily skewed towards retirees finding one in two respondents may sell some holdings before July 1, 2027.

The findings point to concern among asset-holding investors over plans to replace the 50 per cent CGT discount with inflation indexation.

Some 43 per cent of the 1111 respondents in the Australian Shareholders Association investor survey were aged over 75 and just 7 per cent under 45.

ASA chief executive Rachel Waterhouse on Friday cautioned the sample of younger people was small and said the results should be read “with that in mind”.

“However, a higher proportion of investors aged 18 to 54 said they may consider selling some assets before July next year, compared with respondents aged 55 and over: 59.6 per cent compared with 49.5 per cent,” she said.

The survey found 65 per cent of respondents supported keeping the current CGT discount, while 69 per cent said the proposed changes would make them less confident investing outside superannuation.

More than half said they may shift towards income-producing investments over growth assets if the changes proceed, while 55 per cent said they expected to need paid advice to understand how the changes would affect their investments or financial plans.

“Investors are telling us the proposed changes could affect whether they invest, how they invest and whether they sell assets before the rules change,” Ms Waterhouse said.

“When almost seven in ten respondents say they would be less confident investing outside superannuation, that should concern policymakers.”

The findings also point to uncertainty over how the proposed rules would work in practice.

Seventy-three per cent of respondents called for guidance on how inflation indexation and capital losses would operate, while 72 per cent wanted worked examples for shares, ETFs, listed investment companies and managed funds.

Concern also extended beyond CGT, with 52 per cent of respondents worried about the proposed 30 per cent minimum tax on discretionary trust income.

The ASA will use the survey findings in its submission to a Senate committee examining the changes.

The association will recommend retaining the 50 per cent CGT discount, abandoning the proposed 30 per cent minimum tax on capital gains, delaying major CGT changes until further consultation and undertaking a broader review of investment taxation.

“Tax settings should encourage Australians to invest in productive assets and build long-term financial resilience,” Ms Waterhouse said.

“Instead, these proposed changes risk discouraging investment outside superannuation, increasing compliance costs and weakening the supply of patient capital to Australian companies.”

The age profile of the survey lands against a broader generational divide in investment ownership.

Treasury analysis cited in the policy debate suggests about 90 per cent of Australians would have been financially better off by age 30 if the proposed reforms had been in place since 2000, although higher lifetime earners would have been worse off.

Reserve Bank research has also shown younger Australians have become less represented among property investors while tax office data shows only about one in 10 Australians under 35 own shares.