Capital Gains Tax (CGT) can be one of the heaviest bills that an investor will be forced to shoulder. However, by timing your property sale you can minimise the amount payable.
When selling an investment property, you will have to pay CGT on any profit you make beyond the original purchase price.
By timing the sale of your property so that the effective sale date falls within a more favourable financial year you can minimize your CGT.
What makes a more favourable financial year?
These are years where your planned income is lower than previous years, i.e. your first or second year of retirement. Generally you will fall into a lower taxation bracket and effectively minimize your CGT.
The date of transaction is the contract date not the settlement date. Investors should be aware of that fact because a lot can be gained by timing your sale in terms of CGT.