When should I sell?

Font Size:

Our no-nonsense planner Maurice Patane answers Alice’s question of whether she should sell her investment property now or after she retires.

Q Alice.

I’m planning to retire in four years’ time, when I will be 67. Should I sell my investment property now or wait until after I’ve retired? I would probably have about $100,000 profit to declare if I sold now.

A. If your reason for selling is solely for retirement, then you should analyse whether it is viable to retain the property to provide you with an income stream. On the other hand, this may not be appropriate if the property has a debt, if it requires additional funds for improvements or if you require access to the capital amount to supplement your lifestyle needs in the meantime.

One of the main reasons for selling can be to obtain a better outcome from an alternative investment or strategy. This may include a tax-free superannuation income stream, or having access to capital to minimise your ongoing tax liabilities, or to maximise your Centrelink Age Pension.

One of the advantages of selling now is greater certainty of the proceeds. The current high houseprices combined with record-low interest rates are a good indicator that it may be a time to consider selling your investment property to secure the type of profit you may not see again for a very long time.

Of course, you will need to consider the cost of selling, which includes agent’s commission, legal fees, possible break costs on a fixed loan and capital gains tax (CGT). The advantage of deferring the sale is to possibly reduce the CGT payable when you are paying less or no tax.

The difficulty is determining the future capital growth and the optimum timeframe.

This is a great opportunity to discuss your options and the potential tax implications with your financial planner and accountant.

Do you have a question for Maurice? Then email it to [email protected]

Maurice Patane Access Financial Management

AFSL 229760 Ph (03) 9500 9988

Join YourLifeChoices today
and get this free eBook!

Join
By joining YourLifeChoices you consent that you have read and agree to our Terms & Conditions and Privacy Policy

Written by Maurice Patane

7 Comments

Total Comments: 7
  1. 0
    0

    A VERY important point not mentioned by your “no-nonsense planner” is the date the home was purchased. If it hasn’t been more than a year before sale date capital gains tax may be an issue.

    • 0
      0

      Fast Eddie, back in your box, it’s obvious that Maurice is struggling to give this type of advice so give him a go!!!! In any case, CGT (which actually does not exist) is an issue regardless of when the property was bought!!!!

  2. 0
    0

    If you are transfering one investment to another e.g property into superanuation, you may find that you can contribute up to 3 years of maximum contributions in one year, which might currently be $35,000 x 3 years = $105,000 without being deemed to have any capital gains tax to pay. Therefore you might decide to retire, sell the property and transfer money into your superanuation. Who knows what the rulings will be in three years time! I suggest you gain up-to-date financial advice to assist with this. Wishing you best of luck.

    • 0
      0

      Yes, Blinky Bill, for a person now 49 years old and older the “super” cap is now $35,000 p.a. Top marks, young fella.

    • 0
      0

      Maurice, I know that you are struggling with this type of advice but can you do some homework and please correct Blinky Bill and Fast Eddie re their misguide advice above.

  3. 0
    0

    Maurice, Alice is asking about financial options. She intends to retire at 67 and has potential money to invest. Pray tell, how does she invest her cash into Super after retirement at 67?? Second, Alice claims to make a profit of $100,000 … So what, apart from mythical CGT issues. The bottom line would be how much extra cash in pocket she would have after the sale of the investment property and what would be the total value of her assets after the sale of the property re her Age Pension entitlements!!!! On top of that she is in the danger zone of 4 years before retirement so the 5 years gifting rules may have to be seriously considered!!! These are complex issues and, at best, your no-nonsense advice is summed up as “speak to a financial planner and accountant.” Thanks for the no-nonsense advice.

  4. 0
    0

    The silence is deafening????


FACEBOOK COMMENTS



SPONSORED LINKS

continue reading

Entertainment

Friday Funnies: Short jokes for the shortest month

February flies by too fast, just like these short but sharp jokes. What is the recipe for Honeymoon Salad?Lettuce alone...

Food

Succulent Spice-Roasted Salmon

These little salmon bites are something I've made time and time again over the years and this method of roasting...

Photos

How to take great pictures of gardens

If you've never been too good at taking pictures of your beautiful blooms, now's the time to brush up on...

Aged Care

Paid on par with cleaners: the broader issue affecting aged care

Paid on par with cleaners: the broader issue affecting the quality of aged care Ben Farr-Wharton, Edith Cowan University; Matthew...

Food

Researchers fear diet produces ‘untoward effects on the heart’

The keto diet, lauded for its purported fat-burning capabilities, could be bad for your heart, according to new research. The...

COVID-19

Vaccine overdose cases raise questions over doctor training

Australia's vaccine rollout suffered a major hiccup, with health minister Greg Hunt revealing on Wednesday that two elderly residents at...

Retirement Income

Why middle-income Australians are the big losers in retirement

Australia's middle-income earners are losing out when it comes to retirement income. That's the view of Mercer's senior partner, David...

Food

Nine food and heart health myths busted

Should you cook with butter or olive oil? Is that drink of red wine protecting your heart? Pink Himalayan salt is healthy, right? There...

LOADING MORE ARTICLE...