Sometimes things change, but no matter the reason why you’ve a 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 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
- or a person you’re associated with are 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 them with the intention of being long-term rental property, not for resale and the other criteria listed above does 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 yours or an associates 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 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.