If you’ve been preparing to sell an investment property over the last couple of months and are just about ready to get a contract finalised for the sale of that property, you may want to at least consider holding off on that contract until after June 30th, if you’re not doing so already. Just in case you weren’t already aware – the CGT trigger is based on the contract date, not when it eventually settles.

Selling your property before the end of June means any profit on that property will be taxed this financial year and you may be required to pay a rather hefty tax bill around March 2011. However, if you wait until July it won’t be included until the 09-10 returns, which means you won’t have to pay that bill until around March 2012!

Note if the property is making a capital loss then delaying doesn’t really hold much benefit; and if you are making a profit on the sale of other assets the capital loss on your property would offset those other gains. If you are in that situation you may want to get the contract for sale finalised as soon as possible.

Another reason for delaying a profitable sale is it could be the difference between being eligible for the 50% discount method and not being eligible. Only assets that have been held for a year or over qualify for this discount.

You should also consider your taxable income for this current year, and what you expect to make over the next twelve months. Sometimes, it does work out better to sell sooner, rather than later, particularly if you plan to sell two properties and doing so means that you can stagger them into separate financial years.

As always if you have any questions or would like to run through the strategies you are looking to employ in regards to your own investments, please feel to give us a call or shoot us an email.