When is the right time to sell an investment property?

Tax considerations: ITAA 1997 s115-25, the 50% CGT discount applies if the property is held more than 12 months. Selling at month 11 vs month 13 doubles your CGT bill on the same gain. ITAA 1997 s116-30, sale price for non-arms-length transactions is deemed market value, not actual consideration; if you 'sell' to a relative for $1, you still pay CGT on the market-value gain.

When you SHOULD consider selling: (a) suburb fundamentals have shifted negatively, major employment hub closure, structural oversupply, demographic decline, climate-risk re-rating; (b) capital growth has stalled for 3-5 years + the property's risk-adjusted return is below alternatives (shares, ETFs, business reinvestment); (c) personal cashflow can't sustain the holding cost (job loss, illness, family event); (d) portfolio-level CGT planning (offsetting losses, harvesting gains in low-income years).

When you should NOT sell: (a) just because of a temporary downturn (5-15% pullbacks happen mid-cycle), (b) just because the rental yield is below your initial expectation (rents reset annually + grow over time), (c) emotionally because a tenant left or maintenance is needed, (d) before the 12-month CGT discount eligibility, (e) just because someone offers you a 'good price' if your portfolio plan still wants the asset.

Tax planning: time the sale into a low-income year if possible (lower marginal rate on the gain). Spread the sale across multiple tax years if multi-asset (sell house in FY1, IP in FY2). Pair gain-sales with offsetting loss-sales (CGT crystallisation in the same year). Consult an accountant 6 months before; the tax bill typically arrives 12-15 months after sale + can be material ($50K+ on a $400K gain).