Understanding Property Sales Tax in Australia – What You Need to Know

 




Understanding Property Sales Tax in Australia – What You Need to Know

If you're planning to sell property in Australia, it’s important to understand how property sales are taxed. At Loans AU, we’re here to simplify the process and help you navigate the key taxes that may apply: Capital Gains Tax (CGT) and Goods and Services Tax (GST).


Capital Gains Tax (CGT)

When you sell an investment property or a second home, any profit you make may be subject to Capital Gains Tax. CGT is calculated as the difference between your property's sale price and its original purchase price (plus related costs such as stamp duty and legal fees). This gain is added to your taxable income for the financial year.


Key points to note:

  • If you've held the property for more than 12 months, you may be eligible for a 50% CGT discount.

  • Your main residence is generally exempt from CGT, as long as it was your primary home during ownership.

  • Partial exemptions may apply if the property was rented out for a portion of the ownership period.


Goods and Services Tax (GST)

GST does not usually apply to the sale of existing residential properties, but there are exceptions:

  • New residential properties: If the property has never been sold or has been substantially renovated, it’s classified as “new” and GST may apply.

  • Commercial properties and vacant land: These are typically subject to GST, especially if the seller is registered for GST.

  • Established (second-hand) homes: Usually exempt from GST.


New Rule: Foreign Resident Capital Gains Withholding

As of April 2025, a significant change affects both buyers and sellers:

  • Buyers must withhold 15% of the sale price and pay it to the ATO if the seller does not provide a clearance certificate confirming they are an Australian resident for tax purposes.

  • This rule now applies to all property sales, regardless of value.


Final Thoughts

Selling a property can trigger a range of tax obligations. Whether you're an investor or a homeowner, understanding these taxes is essential to avoid unexpected costs and penalties. At Loans AU, we’re committed to helping you make smart financial decisions and connect you with trusted professionals when needed.


Need advice or finance support? Get in touch with our team at Loans AU – we’re here to help.

#LoansAU #PropertySalesAustralia #CapitalGainsTax #GSTProperty #RealEstateAustralia #AustralianPropertyMarket #HomeSellingTips #FinanceAustralia #MortgageBrokerSydney #InvestmentProperty #TaxAustralia #ForeignResidentWithholding

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