INVESTORS · 23 MIN READ
Selling an investment property in Australia: tax, tenants, costs and timing
The sale price isn’t your profit. How to work out what you’d walk away with, handle the tenancy, understand capital gains tax before and after 1 July 2027, and keep selling costs down.
When you sell your own home, you mostly think about where you’ll live next. When you sell an investment property, you’re making a financial decision about an asset. The price matters, but so do the loan, the selling costs, the tax and what you plan to do with the money. Treat it as a financial decision first and a property sale second.
What should you know before selling an investment property?
Before you sell, work out the property’s current market value, its rental income, your outstanding mortgage, your selling costs and your likely capital gains tax. If tenants live there, you also need to consider the lease, the inspection rules and whether to sell tenanted or vacant. The right approach depends on your finances, the market and your goals. Knowing your likely net proceeds before you list helps you decide with clear eyes.
| Quick facts | Answer |
|---|---|
| Can you sell an investment property? | Yes, including while tenants live there |
| Can you sell with an active lease? | Yes. The lease and your state’s tenancy law affect possession and the sale process. |
| Do you pay capital gains tax? | Often, although exemptions or concessions may apply |
| Can you sell a negatively geared property? | Yes |
| Can you sell before paying off the mortgage? | Yes. The loan is usually paid out from the proceeds at settlement. |
| Can you sell without a real estate agent? | Yes |
| Is the sale price what you keep? | No. Debt, selling costs and tax come out first. |
| Do the tax rules change in 2027? | Yes. CGT and negative gearing changes passed in June 2026 start on 1 July 2027. |
Key takeaways
- Start with your likely net proceeds, not the price you hope to get.
- Rent, interest, maintenance and upcoming capital costs all shape the hold or sell decision.
- You can sell with tenants in place, but the lease and the tenant’s rights come with the sale.
- Your tax depends on your ownership history, your circumstances and the law at the contract date.
- Investors and owner-occupiers value the same property differently, so they need different campaigns.
- Get tax and legal advice before you sign a contract. Changing the date afterwards is not an option.
Should you sell your investment property or keep it?
The decision to sell comes before the sale itself. Investors usually start asking the question because something has changed:
- The property has gone up in value.
- The rent no longer covers enough of the costs.
- Interest rates have risen. The RBA lifted the cash rate in September 2026.
- Maintenance and repairs are getting expensive.
- They want to reduce debt, buy a different investment or free up equity.
- They’re approaching retirement, or their strategy has changed.
When might selling make sense?
Selling is worth considering when the property no longer fits your goals or your circumstances. That might be a cash flow problem you can’t sustain, a large capital expense coming up, or a plan that needs the equity somewhere else.
When might holding make sense?
Holding can make sense when the rent still does its job and you expect the property to keep growing in value. Remember that selling and buying again costs money. On a typical sale you pay selling costs, then stamp duty and purchase costs on the next asset. A good tenancy and a long-term plan are also reasons to stay put.
| Consideration | Holding the property | Selling the property |
|---|---|---|
| Rental income | You keep receiving rent | Rental income ends |
| Ongoing expenses | You keep paying ownership costs | Most holding costs end |
| Market exposure | You stay exposed to future price movements | You lock in the sale value |
| Equity | Stays tied up in the property, unless you borrow against it | Released after debt and costs |
| Tax | Rental income and expenses taxed each year | Possible CGT and other transaction costs |
| Flexibility | The property stays in your portfolio | The proceeds are free for other uses |
Negative cash flow on its own doesn’t mean you should sell, and a strong market doesn’t either. Some investors accept a shortfall for years because they expect growth. Others can’t. The answer depends on your numbers and your plans, which is why the next section matters. For the bigger picture on timing, read is now a good time to sell.
Ben’s insightThe right time to sell an investment property isn’t when everyone else is selling. It comes down to how your property performs, your financial position and what you want to do next.
The five numbers to check before selling an investment property
Get these five figures in front of you before you talk to anyone about listing.
Market value
What could it realistically sell for?
Rental return
What income and costs would you give up?
Available equity
How much is funded by debt?
Selling and tax costs
What will the sale cost you?
Net proceeds
What would you walk away with?
1. Current market value
Work out what buyers would realistically pay, using recent comparable sales and, where it helps, a professional valuation. Use sold prices, not asking prices.
2. Rental income and holding costs
Look at what the property actually earns. Add up the rent received for the last 12 months, then subtract property management fees, insurance, council rates, land tax, interest, maintenance and strata fees where they apply. That gives you your cash flow.
Cash flow is different from taxable income. Depreciation, capital works deductions and capital improvements are treated differently for tax, so a property can lose money on paper and still cost you less than you think, or the reverse.
3. Outstanding mortgage
Your lender usually needs to be paid out at settlement. Ask for a formal payout figure. Don’t rely on the balance in your banking app, because the payout figure includes interest to the settlement date and any break costs on a fixed-rate loan. If the property secures other loans, your lender may also want a say in how the proceeds are used.
4. Selling and tax costs
List commission or your fixed fee, marketing, conveyancing, mortgage discharge fees and any likely capital gains tax.
5. Net sale proceeds
This is what’s left after selling costs and the loan are paid. It’s the cash that lands in your account, before tax. Keep it separate in your head from your taxable capital gain, which is calculated a different way.
What could you do with the money instead?
Keeping a property means leaving that equity where it is. That’s opportunity cost. Sale proceeds could pay down your home loan, go into a different investment, spread your risk or fund retirement. This article won’t tell you which, because it depends on your circumstances. A licensed financial adviser can help you compare the options. To see what you have to work with, read how much equity do I have.
Ben’s insightWhen you sell an investment property, the number that counts isn’t the sale price. It’s what you’ll have after the mortgage, the selling costs and the tax. That tells you what the investment actually delivered.
How much is your investment property worth?
Two kinds of buyer will look at your property, and they judge it in different ways.
The owner-occupier perspective
Someone buying to live in it focuses on location, presentation, condition, bedrooms and usable space, lifestyle and comparable sales. They’re buying a home and paying for how it feels.
The investor perspective
An investor also looks at the current rent, the market rent, gross rental yield, vacancy risk, management costs, maintenance, strata fees or land tax, and expected growth.
The current rent alone doesn’t set the price. A property rented below market can still sell well to an owner-occupier. And an investor buying mainly for income may pay less than a family who wants to move in. Work out which buyer is likely to pay more for your property before you choose how to sell it. For the method, read how much is my house worth and how to price your property.
Should you sell your investment property with tenants or vacant?
This choice shapes the whole campaign. It decides which buyers you reach, how the property looks, when buyers can inspect, whether you can offer vacant possession, whether rent keeps coming in, and how settlement works.
| Factor | Sell with tenants | Sell vacant |
|---|---|---|
| Rental income | Can continue during the campaign | Usually stops |
| Presentation | Harder to control | Easier to prepare and style |
| Inspections | Must follow the tenant’s rights and access rules | More flexible |
| Investor appeal | An existing tenancy can attract investors | Investors judge the likely rent |
| Owner-occupier appeal | The lease can delay when they move in | Vacant possession appeals to more buyers |
| Holding costs | Rent helps cover costs | You carry the costs with no rent |
Can you sell an investment property with tenants?
Yes. Selling doesn’t end a tenancy. Whether you can hand over vacant possession depends on the lease and your state’s tenancy law. In Queensland, for example, the Residential Tenancies Authority says the tenancy agreement continues when a rental property is sold, and the buyer takes it over. Fixed-term tenants can generally stay until their term ends.
You can’t simply ask tenants to leave because you’ve decided to sell. Some states let you end a lease when a buyer needs vacant possession, with set notice periods and conditions. Check those rules before you promise a buyer vacant possession in the contract.
What rights do tenants have when the property is for sale?
Every state requires written notice that you plan to sell, and limits how often and when buyers can come through. The main points differ by state.
| State | Important considerations |
|---|---|
| Victoria | Notice of intention to sell. Sales inspections limited to twice a week, up to an hour each. You pay the renter for each sales inspection: half a day’s rent or $30, whichever is more. |
| NSW | Written notice at least 14 days before the first buyer inspection, and limits on access after that |
| Queensland | Notice of intention to sell (Form 10), entry notices for each inspection, and the tenant’s written agreement before any open house |
| Western Australia | Written entry notices, plus the tenant’s rights to privacy and quiet enjoyment |
| South Australia | Notice requirements, inspection limits and restrictions on photographing the tenant’s belongings |
Notice periods differ from state to state, so don’t use one state’s rules for a property in another. Our tenant notice guide for VIC, NSW and QLD sets out the notices, inspection limits and lease-ending rules from each regulator. Your property manager should also know the current requirements.
Capital gains tax when selling an investment property
Rules are changing on 1 July 2027Tax laws passed in June 2026 change how capital gains and negative gearing work from 1 July 2027. This section separates the rules that apply to a sale today from the rules that start later. Get a personal calculation from a registered tax agent before you decide when to sell.
Do you pay CGT when selling an investment property?
Usually, a CGT event happens when you sell an investment property. How much of the gain is taxable depends on your cost base, how long you owned it, how you used it, and any exemptions or concessions you qualify for. Two investors selling at the same price can end up with very different tax bills.
How is capital gains tax calculated?
The basic formula. Your accountant applies the discounts, exemptions and adjustments that fit your situation.
Don’t just subtract the price you paid from the price you sell for. The cost base can include stamp duty and legal costs from the purchase, capital improvements, and selling costs such as commission, advertising and conveyancing. Capital works deductions you’ve already claimed generally reduce the cost base, which increases the gain. Depreciating assets like appliances and carpets are treated separately again.
What about the 50% CGT discount?
For sales before 1 July 2027, eligible Australian-resident individuals who owned the property for at least 12 months can generally reduce their capital gain by 50%. Australian trusts can also use the discount. Companies cannot. If you have capital losses, they come off first, and the discount applies to what remains.
The six-year rule for former homes
If the property used to be your home, the main residence exemption may still apply while you rent it out. Under the absence rule, you can generally keep treating it as your main residence for up to six years at a time while it earns rent, provided you don’t treat another property as your main residence over the same period. The conditions are strict. Owning another home, how you first used the property and your tax residency can all change the result. Foreign residents generally can’t use the main residence exemption at all.
Which tax year does the sale fall into?
For a normal sale, the CGT event happens on the date you sign the contract, not the settlement date. A contract signed on 28 June and settled in August belongs to the earlier financial year. That date also counts for the 12-month ownership test.
If you sign the contract on or after 1 July 2027, the new rules below apply to the part of the gain that builds up from that date.
What tax changes start on 1 July 2027?
The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 became law on 26 June 2026. The main changes for residential investors are:
| Change | What it means |
|---|---|
| CGT discount replaced | For individuals, trusts and partnerships, gains that build up from 1 July 2027 are calculated by indexing the cost base to inflation, in place of the flat 50% discount. You pay tax on the gain above inflation. |
| Minimum tax on capital gains | A 30% minimum tax applies to real capital gains realised from 1 July 2027. Some income support recipients are exempt. |
| Gains made before 1 July 2027 | Keep the 50% discount. The law treats assets held on 30 June 2027 as sold and bought back at market value at that date, or you can elect an apportionment method. |
| New residential builds | Investors in eligible new builds can choose the 50% discount or indexation with the minimum tax when they sell. |
| Negative gearing | For established homes bought after 7:30pm AEST on 12 May 2026, from 1 July 2027 rental losses can only offset residential property income, including capital gains. Unused losses carry forward. Properties held before that time keep their current treatment until sold. |
In short: if you sign a contract before 1 July 2027, the current rules apply. If you sell after that, your gain is split into the part before 1 July 2027 and the part after, and each part has its own rules. Your result depends on how long you’ve held the property, inflation, your income and the property type.
If you plan to hold past 1 July 2027, keep good records of the property’s value at that date. A valuation as at 1 July 2027 may matter a great deal when you eventually sell. Don’t rush a sale to beat the deadline without a tax agent’s calculation, because selling costs, a poor sale price or a lost tenancy can outweigh the tax difference.
How much money will you actually make selling your investment property?
Here’s a worked example.
Hypothetical amounts only. Excludes capital gains tax, tax adjustments, outstanding rates, other liabilities and any other costs. Not a forecast of actual proceeds.
That $455,000 is not your investment profit. Much of it is your own money: the deposit you put in, the principal you’ve paid off and the equity you’ve built. To measure the real return, you’d need the purchase price, purchase costs, rent and expenses over the years, capital spending, tax and more.
Selling costs come straight out of your cash. If the selling service in this example cost $6,900 instead of $23,000, you’d take home about $16,000 more before tax, less any optional extras such as photography.
Gross sale price vs cash proceeds vs taxable capital gain
| Metric | What it measures |
|---|---|
| Gross sale price | What the buyer pays for the property |
| Cash proceeds after debt and selling costs | Roughly what lands in your account at settlement, before tax |
| Taxable capital gain | The gain worked out under the CGT rules, after adjustments, exemptions and discounts |
Many owners assume the cash they receive is the profit they’ll be taxed on. It isn’t. Your taxable gain can be bigger or smaller than your cash proceeds, depending on how much you borrowed and your cost base.
Ben’s insightInvestors spend years watching rent, interest rates and maintenance bills. Give the cost of selling the same attention, because it comes straight off your final return.
Who is likely to buy your investment property?
Your likely buyer decides how you present the property and what you put in the listing.
Selling to another investor
A good tenant can help when the buyer wants income from day one. Have this ready:
- Current rent and lease term
- Rental history
- Property management arrangements
- Annual property expenses
- Condition and any maintenance due
Selling to an owner-occupier
Owner-occupiers care more about presentation, lifestyle, condition, school zones, the floorplan and when they can move in. Vacant possession, or a lease ending soon, makes your property easier for them to buy.
Selling to developers
If your property has genuine development potential, some buyers will value the land and the planning controls more than the rent. Get planning advice before you claim development potential in your marketing. Buyers will check, and a claim you can’t support can backfire.
Ben’s insightAn investor might like your property because it’s already tenanted and earning. Someone buying to live in it looks at it completely differently. Decide who you’re selling to before you plan the campaign.
How to sell an investment property in Australia: step by step
The general selling process is in the process of selling a house. These are the steps that matter most for an investment.
| Step | What to do |
|---|---|
| 1. Review your investment | Check rental performance, debt, equity and your goals |
| 2. Estimate value and net proceeds | Comparable sales, selling costs and early tax advice |
| 3. Review the tenancy | Lease terms, access rules and whether you can offer vacant possession |
| 4. Confirm tax and legal requirements | Accountant, conveyancer, vendor disclosure and an ATO clearance certificate |
| 5. Choose how to sell | Traditional agent, private sale or a fixed-fee service |
| 6. Prepare and advertise | Presentation, photography, buyer targeting and marketing |
| 7. Manage enquiries and offers | Inspections, qualifying buyers, conditions and negotiation |
| 8. Complete settlement | Loan discharge, handing over the tenancy or vacant possession, and keeping records for tax |
Don’t forget the ATO clearance certificate
For contracts signed from 1 January 2025, the buyer must withhold 15% of the price and send it to the ATO unless you give them a clearance certificate by settlement. The old $750,000 threshold no longer applies, so this covers every sale. On a $900,000 sale, that’s $135,000 held back. Australian residents apply online through the ATO, and it’s free. Apply as soon as you decide to sell.
This withholding is not your final tax bill. It’s a collection mechanism aimed at foreign residents. Your actual CGT is worked out in your tax return.
For offers and counter-offers, see home selling negotiation strategies.
What does it cost to sell an investment property?
| Cost | Explanation |
|---|---|
| Commission or fixed fee | Depends on how you sell |
| Marketing | Photography, advertising, portal listings and upgrades |
| Conveyancing | Contract, disclosure and settlement |
| Mortgage discharge | Loan payout, discharge fees and any break costs |
| Preparation | Cleaning, repairs, styling or maintenance |
| Tenancy costs | Inspection compensation where required, lost rent if vacant |
| Holding costs | Interest, insurance, rates and other bills during the campaign |
| Capital gains tax | Depends on your circumstances and the law at the contract date |
Commission, advertising and legal costs on the sale generally go into your CGT cost base. You can’t claim them as a rental deduction. That reduces your taxable gain, but only by a fraction of what you paid, so a bigger selling bill never pays for itself at tax time. If you take the property off the rental market to sell it vacant, interest and other costs for that period may stop being deductible. Ask your tax agent.
For the detail, see real estate advertising costs and the cost of selling a house.
Can you sell an investment property without a real estate agent?
Yes. You can sell privately or use a fixed-fee service. A tenant adds some coordination, because inspections have to follow the tenancy rules.
| Selling method | How it works |
|---|---|
| Traditional agent | The agency runs the campaign for a commission or agreed fee |
| Private sale | You handle advertising, enquiries and offers yourself |
| Managed fixed-fee service | You keep control and pay a flat fee for defined marketing and sales work |
When you sell an investment, every expense changes what you keep. How much professional support you pay for is a cost you can choose before you list.
With Unreserved Plus ($6,900: $2,000 up front and $4,900 on sale), a campaign manager builds and runs your campaign, handles buyer enquiries and follow-up, and negotiates the offers. You, or someone you nominate, run the inspections. For a tenanted property, those inspections still have to follow your state’s tenancy laws, so you coordinate times with the tenant and your property manager. On a $900,000 sale, commission at 2.5% would be $22,500 plus GST. Plus costs $6,900 whatever the price.
If you’d rather run the sale yourself, Unreserved Lite ($900) gives you the tools and a listing on realestate.com.au, Domain and three more portals.
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Before you list
Frequently asked questions
How do you sell an investment property in Australia?
Review the property’s performance and your loan, estimate its value and your net proceeds, and get tax advice. Check the lease and your state’s tenancy rules, then decide whether to sell tenanted or vacant. Get your contract, disclosure and clearance certificate ready, choose how to sell, then advertise, negotiate and settle.
When is the best time to sell an investment property?
There’s no single best time. It depends on how the property performs, your finances, your tax position and the market. The contract date also sets which tax year and which tax rules apply, so talk to a tax agent before you sign.
Should I sell my investment property or keep it?
Compare what you’d keep after the loan, selling costs and tax with the rent, costs and growth you’d give up. Then consider what else you’d do with the money. A licensed financial adviser can help with your situation.
Can I sell an investment property with tenants?
Yes. The sale doesn’t end the tenancy, and the buyer usually takes over the lease. You must give your tenants written notice and follow your state’s rules on inspections.
Is it better to sell an investment property vacant or tenanted?
It depends on your likely buyer. Investors may like a good existing tenancy. Owner-occupiers usually want vacant possession and may pay more for it. Selling vacant makes presentation easier, but you lose rent during the campaign.
What happens to a lease when a rental property is sold?
The lease generally continues, and the buyer becomes the new landlord. Some states allow a lease to end when a buyer needs vacant possession, with set notice periods. Fixed-term tenants can generally stay until the term ends.
How much capital gains tax do you pay when selling an investment property?
It depends on your capital gain, your income, how long you owned the property and any exemptions. For contracts signed before 1 July 2027, eligible individuals who held the property for at least 12 months can generally halve the gain before it’s added to their taxable income.
How will the 2027 CGT changes affect investment property sellers?
From 1 July 2027, gains that build up after that date use cost base indexation in place of the 50% discount, with a 30% minimum tax on real gains. Gains made before then keep the 50% discount. The effect on you depends on your holding period, inflation and income, so ask a tax agent.
Can I use the six-year rule when selling a former home?
Possibly. If the property was your main residence before you rented it out, you may be able to treat it as your main residence for up to six years of renting, as long as you don’t treat another property as your main residence over that time. Residency and other conditions apply.
Can I sell an investment property with an outstanding mortgage?
Yes. Your lender is usually paid out from the sale proceeds at settlement. Get a formal payout figure, which includes interest to settlement and any break costs.
What happens if I sell my investment property at a loss?
A capital loss can offset capital gains in the same year or be carried forward to future years. It generally can’t reduce your other income, such as salary.
How much profit will I make selling an investment property?
Your cash proceeds are the sale price minus the loan payout and selling costs. Your profit on the investment also depends on what you paid, your purchase costs, rent and expenses over the years, capital spending and tax.
What expenses can I claim when selling an investment property?
Selling costs such as commission, advertising and conveyancing generally go into your CGT cost base, which reduces your capital gain. They aren’t claimed as rental deductions.
Can I sell an investment property without a real estate agent?
Yes. You can sell privately or use a fixed-fee service. With Unreserved Plus, a campaign manager handles marketing, enquiries and negotiation for $6,900, and you coordinate inspections with your tenant.
Can I sell an investment property before the lease expires?
Yes. You can sell at any time, but a fixed-term tenant can generally stay until the lease ends. That may limit you to investor buyers or a later settlement date.
Is it worth renovating an investment property before selling?
Sometimes. Repairs, paint and cleaning often help. Big renovations rarely return their full cost, take time and may disturb tenants. Read how renovations affect property value.
How long does it take to sell an investment property?
Capital city homes took a median 39 days to sell in the three months to September 2026, according to Cotality. Add time for tenancy notices before you list and a settlement period of 30 to 90 days after the contract.
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Where this comes from. The rules in this guide are drawn from these official sources. They change, so check the current version for your state before you act.
- ATO: CGT when selling your rental property
- ATO: CGT discount
- ATO: Cost base of an asset
- ATO: Your main residence (home) and CGT
- ATO: Clearance certificates for Australian residents
- Treasury: Budget 2026-27 tax system changes
- State Revenue Office Victoria: Land tax
- Revenue NSW: Land tax
- Queensland Revenue Office: Land tax
General information only. Tax rules last reviewed 14 October 2026. This article provides general information about selling residential investment property in Australia. It is for educational purposes and is not financial, taxation, investment, lending or legal advice. The financial and tax consequences of selling depend on your circumstances, ownership structure, tenancy arrangements and the laws that apply at the time of sale. Sources include the Australian Taxation Office, the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, Consumer Affairs Victoria, NSW Fair Trading, the Residential Tenancies Authority (Queensland) and Cotality. Before deciding to sell, keep or refinance, get independent advice from a registered tax agent, accountant, financial adviser, mortgage broker, conveyancer, solicitor or other licensed professional. Unreserved Real Estate is a licensed agency.
ABOUT THE AUTHOR
Ben Williams
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Ben spent 15+ years as a licensed estate agent and conducted over 2,000 auctions before founding Unreserved. He holds a Bachelor of Applied Science (Property & Valuation) from RMIT and is licensed across VIC, NSW, QLD, SA, and WA.
