Is it time to sell your investment property?

If you’re a Neutral Bay resident who’s been thinking about selling your investment property, now may be the time to do it. The current Sydney real estate market conditions are ideal for sellers, and with interest rates still relatively low, now is a great time if you are looking to release some equity.

When should I let an investment property go?

There are many reasons to sell your investment property but knowing that the time is right can be a little tricky. These are the points to consider when making your decision:

Capital gains tax is one factor. Depending on how long you have owned your Neutral Bay investment property, you may have to think about capital gains tax.

Capital gains tax is the tax the government makes you pay on selling your investment property. It is calculated on the profit you make from the sale, so the difference between your purchase and sale prices.

It’s worth understanding capital gains tax because there are four ways you may be eligible to minimise your fee.

• The 50% rule: If you have owned your investment property for more than 12 months, you are entitled to a 50% discount on the capital gains tax for your property.
• Primary residence: You don’t have to pay capital gains tax on a property that has been your primary residence (this won’t apply to a home you rent to others).
• The six-year rule: If you previously used your investment property as your primary residence, you can apply for a CGT exemption for up to six years after you moved out. So if you move out, rent the property out for less than six years, and then sell, you may be able to avoid CGT.
• The six-month rule: If you have used more than one property as your primary place of residence in a six-month period, you may also be eligible for exemptions as long as:
  • You lived at the older property for at least three months of the 12 months before the sale date.
  • You didn’t receive any accessible income from the property in the 12 months leading up to the sale.

If you are eligible for any of these exemptions, then now will be an excellent time to sell. You don’t want to let those six years pass and then have to pay full CGT. Speak to your financial advisor on the best move for you. We have plenty of people we can recommend.

Spring is always a good time to sell in Neutral Bay

Selling your Neutral Bay investment property is all about getting the timing right. Spring is traditionally the best time to sell Sydney real estate because buyers will be thick on the ground. If you want to take advantage of the peak period, you still have time to start getting your investment property ready to sell.

There is a rental shortage at the moment, and other investors will be keen to snap up potential Neutral Bay rental properties, knowing they will get top price when they find tenants.

Some other points to consider

Now is the best time to release equity and buy fresh investments if you have a clear property strategy in mind. If you feel your current investment property has run its course and it is time for fresh investments, you should do so before any further interest rate rises.

An obvious reason to sell is that you need the money. Whether you have been hard hit by the pandemic, hope to reinvest, need to do some renovations on your own home, or just need a holiday, this is what your investment property has been for. You can’t hold onto it forever, so why not make a move now?

Want an informal chat about current market conditions?

These are general tips, and we are not specialised financial advisers. When it comes to the financial aspect of your decision, always talk to your accountant or financial adviser for more in-depth and specific advice. But when it comes to selling in Neutral Bay and the Lower North Shore, we are here to help.

Want to sell your Neutral Bay investment property? Contact Home Property Agents today.