Sometimes things change, but whatever your reason for selling your residential property, any profit you make on the sale is taxable when you:
- bought the property and you had a firm intention to sell it
- have a regular pattern of buying and selling or building and selling your main home
- sell it within the applicable bright-line period and exclusions do not apply
- are associated with a person in the business of property dealing, developing or building and the property was bought for the business.
Selling your rental property or portfolio
There may be a number of reasons why you may decide to sell property intended for long-term rental, sooner than you thought, including deciding to get out of investing in rental properties.
No matter the reason why you’ve sold 1 or more rental properties the profit will generally only be taxable if one of the criteria above is met.
You become a dealer
If you decide to switch from being a landlord to a property dealer, any profits on your sales of new property bought from the time you become a dealer will be taxable.
This probably will not affect the sale of any rental properties you owned before becoming a dealer. That's assuming:
- you bought the properties intending to rent them long-term, not to resell
- the other criteria listed above do not apply.
You sell your family (or main) home
If you’re moving house or other changes in circumstances mean you have to sell your family (or main) home, any profit from the sale of it generally will not be taxable.
But if you bought your family (or main) home:
- intending to resell it, and
- you have a regular pattern of buying and selling your family home, or
- it was originally bought as part of your or an associate's land dealing, developing or building business
any profit will probably be taxable, regardless of the reason you decided to sell and whether it falls outside an applicable bright-line period.
If your family (or main) home was acquired and sold after 27 March 2021, for any period of more than a year that it was not used as your main home, the bright-line property rule will apply and the portion of your profit that relates to that period will be taxable.