Capital Gains Tax When Selling Property – Mastin Harris Accountants

Start here: the quick CGT checklist

Tick what applies. The more boxes you tick, the more likely you need a proper CGT timeline and advice before signing a contract.

How the property was used

It was rented out at any point (even briefly).
It started as my home, then became a rental (or vice‑versa).
I owned another home at the same time.
I renovated or did major upgrades (not just repairs).

Things that drive the tax bill

I claimed depreciation / capital works deductions over the years.
I’m thinking about timing the sale for a particular financial year.
There are multiple owners or ownership percentages changed.
I can’t easily find my purchase, renovation, or selling cost records.

Tell it like it is: CGT problems usually come from assumptions and missing records, not from the tax law itself. If the property was ever rented, do a timeline now, not after the contract is signed.

How CGT works in plain English

The moving parts that determine whether you pay no CGT, some CGT, or a lot of CGT.

CGT isn’t a separate tax rate

Any taxable capital gain generally flows into your income for the year and is taxed at your marginal rates.

Contract date matters

The sale usually lands in the financial year you sign the contract (not settlement).

Main residence rules drive outcomes

If it was your main home for the whole time, you may be fully exempt. Mixed use often leads to partial CGT.

The one line you should remember

The tax outcome depends on your timeline: when you lived there, when it was rented, and whether another property was treated as your home at the same time.

The “good” CGT scenarios

These are the situations where CGT is often minimal or nil, assuming the facts stack up and records are in order.

Often favourable

The property was genuinely your main residence for the entire ownership period.
You moved out and rented it, but you’re within the main‑residence “absence” rules and you haven’t doubled up on another home in a way that breaks the exemption.
It’s an investment property held for more than 12 months (so the CGT discount may apply).

What makes it stay “good”

Clear dates: moved in/out, rental periods, and contract dates.
Clean records of purchase and selling costs (agent, advertising, legal, etc.).
Invoices for improvements that should form part of the cost base.

Good exampleLow CGT risk

A couple sell the home they have lived in the whole time, with no rental period and clean purchase/sale documents. CGT is commonly fully exempt.

Good exampleOften workable

An owner moved out for work, rented the property for a period, kept good records, and the timeline supports continuing main‑residence treatment under the relevant rules.

The “bad” CGT scenarios (where people get caught)

These are common traps. They don’t mean you’ve done anything wrong — they just tend to create partial CGT or bigger tax bills than expected.

Common traps

Assuming “moving back in for a year” wipes CGT. It usually doesn’t erase the history of income‑producing use.
Owning another home at the same time and assuming both can be fully CGT‑free without limits.
Missing records for renovations/improvements, so cost base is understated.
Claiming capital works (building write‑off) for years and forgetting it typically reduces the cost base for CGT purposes, increasing the gain on sale.

What to do if any of these apply

Build a timeline and get advice before you sign the contract.
Collect a “cost base folder” now (purchase, improvements, selling costs, depreciation schedules).
Be realistic about the tax year: contract date usually drives the timing.

Bad exampleMyth trap

An owner rents the property for years, then moves back in briefly thinking it “resets” CGT. In many cases the rental period still drives a partial taxable gain.

Bad exampleRecord trap

Major renovations were done over several years, but invoices are missing. Without evidence, it’s harder to support a higher cost base and the gain can look larger than it should.

Quick myth check: “If I move back in for a year, CGT disappears”

In practice, CGT is driven by the whole ownership timeline and how the property was used. Moving back in can affect future treatment, but it does not automatically remove earlier taxable periods. Treat this as a “get advice” trigger.

Best practice: how to minimise CGT surprises

You can’t always avoid CGT. But you can avoid avoidable mistakes.

Do this before you list the property

Write a simple timeline: purchase date, move‑in/out dates, rental start/stop dates.
Confirm whether you treated another property as your main residence during any overlap.
Pull together purchase costs: contract, stamp duty, legal fees, buyer’s agent fees (if any).
Gather improvement invoices (extensions, kitchens, bathrooms, structural work).

Do this before you sign the contract

Estimate CGT early so you can plan cashflow (don’t leave it to tax time).
Check if the CGT discount should apply (generally requires holding > 12 months).
If you claimed depreciation/capital works, collect the quantity surveyor report and prior schedules.
If timing matters, remember: the contract date usually drives which financial year the gain falls into.

Practical tip: create a folder called “CGT — [Property Address]” and dump every relevant document in it. When you sell, that folder saves time, fees, and usually tax.

Next steps (if you want us to check your CGT position)

Here’s what we usually ask for so we can give you a clear, defensible answer.

Property address and ownership split (who owns what %).
Purchase contract date and settlement date.
Timeline of living vs renting (dates matter).
Any period where another property was treated as your main residence.
Depreciation / capital works schedule (if the property was ever rented).
Selling costs estimate (agent, advertising, legal, discharge of mortgage).

If you’d like to discuss any of the above further, please don’t hesitate to contact our office.

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Australian reference sources

Primary guidance pages we use as a baseline (plus the facts of your situation).

General information only. This page is not legal or financial advice and does not consider your specific circumstances.