Capital Gain Tax when IP sold

I am 3 years to retirement and would continue to be full time employed until then. I got an IP which has appreciated its value by $200k.
Someone said that the Capital Gain Tax would depend on the income I have at the time of selling. I am not sure of this.

so my question is
Should I sell it now? Or should I be selling when I am retired?

 

The amount of CGT you pay is impacted by your income (as it is essentially considered additional income for that financial year). In which case selling when you have a lower income can reduce the overall tax paid on a sold investment. In saying that, this is not financial advice and I would encourage you to speak to an accountant to discuss what might be best for you moving forward.

 

Selling later may save you tax due to the general drop in tax rates but also due to the lower income. But you have to factor in more than tax. What about income and growth during those years? What about the loan issues? Start planning now.

 

Thank you for your time and for confirming this

 

Thanks for responding and for the sort of confirmation.

 

An appreciation in value of $200K doesnt mean that is the CGT profit and then half of any actual gain is only subject to tax at a taxpayer marginal tax rate. Calculating that profit with tax advice and estimating the tax would be wise. Then calculate what the sale would realise after selling costs are paid from proceeds, loan is discharged etc and deduct the tax. How will you benefit through use of the equity ? Does it affect a pension or other benefits as a CGT gain is.... income.
What is the property costing to hold ? If its cups of coffee then is selling necessary ? These are all elements of the advice when we get asked.

What can you and spouse do to minimise tax ? Super contributions ? Catch up ? Tax advisers can check eligibility and calc merits.

The same numbers can also be run assuming retirement incomes. Yes it may save some tax. How much ? It could be less than you suspect or be a decent saving. But delaying sale may also see a lower sale price if property prices have been tipped to fall in some areas by up to 15% (perhaps less, perhaps more ?). The deferral tax savings need to be weighed up against that risk.