• Selling your rental property

    You may make a capital gain or capital loss when you sell or otherwise dispose of a rental property (unless you acquired it before CGT started on 20 September 1985).

    You can also make a capital gain or capital loss from some capital improvements made since that date to a property you acquired previously.

    You make a capital gain from the sale of your rental property to the extent that the capital proceeds you receive are more than the cost base of the property (see Working out your capital gain or loss).

    You make a capital loss to the extent that the property’s reduced cost base exceeds those capital proceeds.

    If you're a co-owner of an investment property, you'll make a capital gain or capital loss in accordance with your interest in the property.

    The cost base and reduced cost base of a property includes the amount you paid for it together with some incidental costs associated with acquiring, holding and disposing of it (such as legal fees, stamp duty and real estate agent’s commissions). Amounts that you've claimed as a tax deduction or that you can claim are excluded from the property’s cost base or reduced cost base.

    Your capital gain or capital loss may be disregarded if a rollover applies – for example, if your property was destroyed or compulsorily acquired or you transferred it to your former spouse under a family law settlement.

    See also:

    Depreciating assets

    If the sale of your rental property includes depreciating assets, you’ll need to apportion your capital proceeds between the property and the depreciating assets, and a ‘balancing adjustment event’ will happen to those assets.

    See also:

    Last modified: 10 Jun 2015QC 22172