Selling A Property FAQs:
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I’m buying my first home. What should I need to consider if I want to sell it in a few years time and buy another?
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You can sell your home whenever you like. However if you receive the First Home Owner Grant and Stamp duty concessions when you buy it, you must move into it within 12 months from the date of settlement and reside there at least for a period of 6 months. If you do not meet these criteria, you will have to repay the Grant and concessions received.
If you only intend taking out a home loan for a short period of time, you should check carefully what the early repayment fees are when choosing your home loan. Early repayment fees are generally payable if you redeem your mortgage in the first few years of the loan and are generally about 1% of the loan amount.
Another option is to take out a portable home loan. A portable home loan is one where you can sell your first property and transfer the home loan to your new property. You should check with your home loan lender what restrictions apply – for example, often you need to arrange for simultaneous settlement on both properties.
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What tax do I have to pay when I sell my property?
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There is a difference between buying a house to live in, and buying a house to rent out as an investment property.
If you buy and live in a house as your main residence, it is exempt from Capital Gains Tax (CGT) when you sell it. However, if you are eligible and have claimed the First Home Owners Grant and Stamp duty concessions, you must move into the house within 12 months from the date of settlement and live there for a period of at least 6 months. If you don’t meet these criteria, you must repay the Grant and concessions received.
If you buy a property as an investment and rent it out, it will be subject to CGT when you sell it. The CGT is higher when you sell it within the first year of acquisition. You should contact your Accountant or Financial Planner for specific advice.
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