INVESTORS · 11 MIN READ
Selling an investment property: the tenant, the tax and the fee.
Tenant notice rules in VIC, NSW and QLD, how capital gains tax works on a rental, when the clock actually stops, and what commission costs you on every sale in your portfolio.
If you own three investment properties and sell them over the next decade at $900,000 each, commission at 2.1% costs you $56,700. That money does not buy you a better yield, a lower tax bill or a faster settlement. It is dead money, paid on every transaction. Selling an investment is also different from selling your home: there is a tenant with legal rights, a capital gain the ATO will want to see, and a date that matters more than most owners realise. This guide covers all three.
The short answer
To sell an investment property in Australia, decide whether to sell tenanted or vacant, then give your state’s written notices. Capital gains tax is triggered on the contract date, not settlement. Resident individuals who held the property at least 12 months generally halve the gain, and selling costs such as commission go into the cost base.
This is general information, not financial or tax advice. Talk to your accountant before you sign.
01 · The tenant
Should you sell with the tenant in place or vacant?
A lease does not stop you selling. It changes who will buy and how easy the campaign is to run. Sell tenanted and you keep the rent coming in, and you appeal to other investors who want an income from day one. Sell vacant and you open the door to owner-occupiers, who often pay more for a home they can move into, but you give up rent and may wait months for the lease to end.
There is no rule that one is better. In my experience the deciding question is simple: who is the most likely buyer for this property? A two-bedroom unit near a train line is often an investor’s purchase. A family house in a school zone usually is not.
Sell tenanted if
- The likely buyer is another investor
- The rent is at or near market and the tenant pays on time
- The tenant keeps the place presentable and will work with inspection times
- You cannot afford months with no rent
Think about vacant if
- The likely buyer is an owner-occupier
- The property needs styling, repairs or repainting to show well
- The tenant cannot or will not allow regular inspections
- The rent is well below market, which drags on investor offers
02 · State rules
What notice do you give a tenant when you sell?
Every state has its own rules, and all three of the biggest markets have changed them in the past few years. There are two separate sets of notices. The first lets you market the property and bring buyers through. The second, which is longer, ends the lease if a buyer wants vacant possession. A fixed-term tenant can generally stay until the end of their term in all three states, so check the lease end date before you choose a settlement date.
Here is a high-level summary from each state’s regulator, checked in October 2026. It is a starting point, not a substitute for reading the rules or getting advice on your lease.
| Rule | Victoria | New South Wales | Queensland |
|---|---|---|---|
| Tell the tenant you are selling | Written notice of intention to sell, at least 14 days before you ask to enter | Written notice of intention to sell, at least 14 days before the first inspection | Notice of lessor’s intention to sell premises (Form 10), given before or with the first entry notice |
| Notice for each inspection | At least 48 hours written notice of entry | 48 hours notice each time | Entry notice (Form 9) with at least 48 hours notice |
| How often | No more than twice a week, up to one hour each, between 8am and 6pm, not on public holidays | Tenant does not have to agree to more than 2 inspections a week | Reasonable time between entries. Open homes and on-site auctions only if the tenant agrees in writing |
| Paying the tenant | Compensation for every sales inspection: half a day’s rent or $30, whichever is more | No compensation rule found on the regulator page | No compensation rule found on the regulator page |
| Photos for the listing | Tenant can object in writing to photos showing identifiable belongings | No interior photos showing the tenant’s belongings without written consent | Photos showing the tenant’s possessions only with written agreement |
| Ending the lease for a sale | Notice to vacate of at least 90 days. Cannot be used to cut a fixed term short. No re-letting as a home for 6 months | 30 days once a contract requiring vacant possession is signed. For a proposed sale, 60 days (fixed term of 6 months or less) or 90 days (longer fixed term or periodic) | Periodic lease: at least 2 months notice after the contract of sale is signed. Fixed-term tenants can stay to the end of the term |
Sources, checked October 2026: Consumer Affairs Victoria, Tenants Victoria, NSW Government (Fair Trading) and the Queensland Residential Tenancies Authority. Full links are in the sources list at the end of this guide. A tenant who was not told about a planned sale before signing a fixed-term lease may be able to leave early: in Victoria with 14 days notice, and in Queensland with 2 weeks notice if the property is advertised within the first two months.
03 · The tax
How does capital gains tax work when you sell a rental?
The ATO describes a capital gain as the difference between what the property cost you to obtain and improve (the cost base) and what you receive when you sell it. Three points matter most for investors.
1. The 50% discount
If you are an Australian resident for tax purposes and you owned the property for at least 12 months before the CGT event, you can reduce the gain by 50%. Australian trusts can also discount by 50%. Companies cannot use the discount at all. If you have capital losses, you subtract those first and apply the discount to what is left.
2. What goes into the cost base
The cost base starts with the purchase price. The ATO then lets you add incidental costs of buying and selling, including the fees of an agent, auctioneer or legal adviser, stamp duty on the purchase, conveyancing, and advertising or marketing to find a buyer. It does not include anything you have claimed, or could claim, as a tax deduction.
3. Commission saves you less tax than you think
Because commission goes into the cost base, investors sometimes treat it as if the tax office pays for it. It does not. A dollar of commission reduces your gain by a dollar, the 50% discount halves that, and your marginal rate takes a slice of what is left. At the top rate you get back well under a quarter of what you paid.
Worked example: general information, not tax advice
An Australian resident individual bought a rental in 2016 for $600,000, paid $30,000 in stamp duty and legal fees, and has claimed $25,000 in capital works deductions. That gives a cost base of $605,000 before selling costs. They sell for $900,000 and pay $1,800 for conveyancing. Every figure here is illustrative.
| Line | Agent at 2.1% | Unreserved Lite, $900 |
|---|---|---|
| Sale price | $900,000 | $900,000 |
| Selling fee | $18,900 | $900 |
| Conveyancing on sale | $1,800 | $1,800 |
| Cost base (incl. selling costs) | $625,700 | $607,700 |
| Capital gain | $274,300 | $292,300 |
| After 50% discount | $137,150 | $146,150 |
| Tax on the gain at 47% | $64,461 | $68,691 |
| Cash after selling costs and CGT | $814,840 | $828,610 |
47% is the top 2026-27 resident rate of 45% plus the 2% Medicare levy, applied to the whole discounted gain for simplicity. Your real rate depends on your other income. Cost base method follows the ATO’s rental property example: purchase price plus purchase costs plus selling costs, minus capital works deductions claimed. Commission shown before GST; with GST the agent column would be worse. Figures rounded to the nearest dollar.
What the example shows
The agent costs $18,000 more. That lowers the taxable gain by $9,000 and the tax by $4,230. You are still $13,770 worse off. At a 32% rate (30% plus Medicare) the tax saving is only $2,880, so the gap is wider: $15,120. Paying more to sell does not pay for itself at tax time.
04 · Timing
Does the contract date or the settlement date count?
The contract date. The ATO is explicit: when you sell a rental property, the CGT event happens when you enter into the contract, not when you settle. In the ATO’s own example, the owners signed in June 2026 and settled in November 2026, and the gain belonged in the 2025-26 tax return.
That has three practical effects:
- The 12-month test. You count ownership to the contract date, excluding the day you bought and the day you sign. Sign one day too early and you can lose the discount.
- The income year. A contract signed on 28 June and one signed on 2 July land in different tax years, even if both settle in September.
- Your other income. If you expect a lower-income year, such as a career break or retirement, your accountant may want the contract to fall in it.
Announced changes from 1 July 2027. In the 2026-27 Budget the government announced it will replace the 50% CGT discount with an inflation-based discount and a minimum 30% tax on capital gains, from 1 July 2027. Treasury says the new rules apply only to gains that accrue from 1 July 2027, and that new builds can choose either system. Negative gearing of residential property is also to be limited to new builds, with properties held before 12 May 2026 exempt.
These are announcements. Check whether they have become law, and how they would treat your property, with your accountant before you time a sale around them.
05 · Records
What paperwork do you need before you sell?
Your depreciation schedule
Depreciation you claimed while you owned the property comes back at sale. The ATO’s method takes capital works deductions, and any decline-in-value deductions on fixtures and fittings, off the cost base. That raises your capital gain. Find the schedule and your tax returns for every year you claimed. The ATO also notes that if you bought after 9 May 2017, you generally could not claim decline in value on second-hand depreciating assets in the first place.
Purchase and improvement records
Your purchase contract, stamp duty receipt, conveyancing invoice and invoices for capital improvements all go into the cost base. The ATO also counts initial repairs to make a newly bought property fit to rent as capital costs. If you lived in the property before renting it out, a full or partial main residence exemption may apply, and that changes the maths completely.
A clearance certificate
Every Australian resident selling Australian real property must have an ATO clearance certificate and give it to the buyer at or before settlement. Without one, the buyer must withhold up to 15% of the price. On a $900,000 sale that is $135,000 held back until you sort it out with the ATO. Apply as soon as you decide to sell.
06 · Other taxes
What about land tax and stamp duty?
Both are state taxes with their own rules, so this guide only points you to the right place. Land tax is assessed by each state revenue office, and how a sale part way through a year is handled varies by state and by contract, so ask your conveyancer how the contract adjusts it at settlement. Stamp duty you paid when you bought goes into your cost base, as above. For the rules where your property is, start with the State Revenue Office Victoria, Revenue NSW or Queensland Revenue Office.
For the full list of what selling costs, including conveyancing, styling and marketing, see what it costs to sell a house.
07 · Net proceeds
How much do you keep with commission vs a flat fee?
Strip out tax and look at the fee alone. The comparison below uses 2.1% commission, which is the conservative end of the 1.8 to 3.5% range agents charge, against each Unreserved plan.
| Option | Fee on $900,000 | You keep vs 2.1% | Fee on $1,200,000 | You keep vs 2.1% | Who runs the sale |
|---|---|---|---|---|---|
| Commission at 2.1% | $18,900 | $25,200 | An agent | ||
| Unreserved Basic | $500 | $18,400 more | $500 | $24,700 more | You, listed on Domain |
| Unreserved Lite | $900 | $18,000 more | $900 | $24,300 more | You, on realestate.com.au, Domain and more |
| Unreserved Plus | $6,900 | $12,000 more | $6,900 | $18,300 more | A licensed agent runs the sale |
Commission before GST and before any marketing package. Plus is $2,000 up front and $4,900 on a successful sale. Lite has a 14-day money-back guarantee. Photography, video and floor plans are optional extras on every plan. Run your own price through the savings calculator.
08 · The honest part
When is a full agent the better call?
Investors often own property a long way from where they live. Someone has to be at every inspection, and in Queensland buyers cannot be left in a tenanted home on their own unless the tenant agrees. If you cannot be there and have no one who can, you need a person on the ground. If the tenant is difficult, or the property is unusual enough that buyers have to be found one by one, a traditional agent may earn their fee. Say so to yourself before you list, not halfway through the campaign.
For most investors the middle ground works. Unreserved Plus puts a licensed agent on your sale for $6,900 with no commission and no lock-in. On a $900,000 property that is $12,000 you keep, and on a portfolio of three it is $36,000.
Start with the price.
A free AI valuation reads recent comparable sales near your investment, so you can see the gain, the commission and your net proceeds on a real number. About 60 seconds.
Get your free valuationQUICK ANSWERS
Investment property questions.
Can I sell my investment property with a tenant in it?
Yes. A lease does not stop a sale, and a fixed-term tenant generally has the right to stay until the end of their term. You must give the tenant written notice that you intend to sell, give notice before each inspection, and stay within your state’s limits on how often buyers can come through. Many investors sell tenanted to buyers who want the rent.
How much notice do I give a tenant when selling?
It depends on the state. In Victoria and NSW you give written notice of intention to sell at least 14 days before the first inspection, then 48 hours notice for each inspection. In Queensland you give a Notice of lessor’s intention to sell (Form 10), then an Entry notice with 48 hours notice. Notice periods to end a lease for a sale are separate and longer.
Is agent commission included in the CGT cost base?
Yes. The ATO lists real estate agent commission, legal and conveyancing fees, and advertising to find a buyer as incidental costs that go into the cost base. That lowers your capital gain, but only by the cost itself. After the 50% discount, an extra $18,000 in commission cuts the taxable gain by $9,000, which at a 47% marginal rate saves about $4,230 in tax.
When does capital gains tax apply when I sell, at contract or settlement?
At contract. The ATO says that when you sell a rental property, the CGT event happens when you enter into the contract, not when you settle. That date decides which income year you report the gain in, and whether you have held the property for the 12 months needed for the 50% discount.
Do I get the 50% CGT discount on an investment property?
Generally yes, if you are an Australian resident for tax purposes, you own the property as an individual or through a trust, and you owned it for at least 12 months before the contract date. Companies cannot use the discount. The government has announced that the 50% discount will be replaced from 1 July 2027 for gains that accrue from that date, so check the current law with your accountant.
Do I need a clearance certificate to sell an investment property?
Yes, if you are an Australian resident for tax purposes. The ATO says every resident selling Australian real property must have a clearance certificate and give it to the buyer at or before settlement. Without one, the buyer must withhold up to 15% of the price. Apply as soon as you decide to sell.
KEEP READING
Check the numbers yourself.
SOURCES
Where these numbers come from.
- ATO, Capital gains tax when selling your rental property (checked Oct 2026)
- ATO, CGT discount (checked Oct 2026)
- ATO, Cost base of an asset (checked Oct 2026)
- ATO, CGT events (checked Oct 2026)
- ATO, Clearance certificates for Australian residents (checked Oct 2026)
- ATO, Tax rates for Australian residents (checked Oct 2026)
- Treasury, Budget 2026-27 tax system changes (checked Oct 2026)
- Consumer Affairs Victoria, When a rental provider can enter a property (checked Oct 2026)
- Consumer Affairs Victoria, Notice to vacate in rental properties (checked Oct 2026)
- Tenants Victoria, Rental home is being sold (checked Oct 2026)
- NSW Government, Minimum notice periods for access to rental property (checked Oct 2026)
- NSW Government, Minimum notice periods for ending a residential tenancy (checked Oct 2026)
- NSW Government, Landlord ending a tenancy (checked Oct 2026)
- Residential Tenancies Authority (QLD), When a property is for sale (checked Oct 2026)
- Residential Tenancies Authority (QLD), Rules of entry (checked Oct 2026)
Not financial or tax advice. This guide is general information about selling an investment property in Australia. It does not take your circumstances into account. Capital gains tax depends on how you own the property, your residency, your other income and your records, and the rules are changing. Talk to your accountant or a registered tax agent before you sign a contract, and to a lawyer or conveyancer about your lease and contract.
ABOUT THE AUTHOR
Ben Williams
Connect with Ben on LinkedIn →
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. He is not a tax adviser, which is why this guide sends you to your accountant.
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