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Selling investment property whilst unemployed?

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Basia | 05 Oct 2013, 12:38 PM Agree 0
Hi there, I have an investment property in Qld and I'm in NSW I bought it in 2000, never lived in it. Bought it for $150k now worth $300k, still have a $100k loan had to borrow more out of the loan over the years...its always been rented out and I have been unemployed now for over a year. I want to sell it cause I'm desperatley trying to find a job and I'm very positive I'll find one soon and have the money from the sale as a deposit for a place to live. I'm living with my mum and can save. So my question is, should I sell it now that I have no income?
  • Eos Property | 13 Oct 2013, 10:58 AM Agree 0
    Hi Basia,

    Too little information provided to give a decent answer but................

    If the property is paying for itself there is probably no real need to sell.

    If, however, you want the peace of mind of not having a mortgage while unemployed, or the property requires an injection of funds from yourself, then a sale is probably your best option.

    Be aware that you will need to be employed, and on more than a temporary contract, to secure another loan for your eventual home. Speak to a broker who should be able to provide explicit borrowing advice.
  • Basia | 13 Oct 2013, 12:15 PM Agree 0
    Thanks for the advice, I meant to say in terms of CGT am I better off selling now that I'm unemployed?
  • Eos Property | 13 Oct 2013, 12:29 PM Agree 0
    Yes - any CGT liabilities are added to your taxable income.

    Broadly speaking, if you're unemployed then by extension your taxable income is lower and you'll be taxed less.

    Just remember if you have owned the property for more than 12 months only 50% of the gain is taxed.

  • Tom | 13 Jun 2014, 06:18 PM Agree 0
    As mentioned by Eos Property. It is better to incur CGT when your income is lowest. So for you is when you are not earning an income as in now. Since you bought in 2000, you will be entitled to the 50% CGT discount. The profit/capital gain will be the cost base (purchase price and buying expenses such as stamp duty, conveyancing, buyers advocate, etc less any depreciation you have claimed over the years) less the selling price of the property (minus selling costs).
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