To sell an investment property in Melbourne, you need rental income statements, property management records, and tax depreciation schedules to demonstrate yield potential to buyers. You must also provide proof of all acquisition and holding costs for CGT purposes and ensure Victorian tenancy law notices are served if the property is occupied. Proactive building and pest reports are recommended to streamline buyer due diligence.
Investor divestment is increasing across Melbourne’s eastern suburbs and the peninsulas as net rental yields have been materially compressed (Forge Property, February 2026). This shift is driven by the cumulative burden of land tax rises, the VRLT expansion, and stricter tenancy law reforms.
Financial records for investor buyers
Buyers purchasing for investment require rental income statements and property management records to verify actual yield. Providing a current tax depreciation schedule is critical, as it allows buyers to understand potential tax offsets and the property’s remaining capital works depreciation (Division 43).
Tax and CGT documentation
The ATO requires records of all costs related to the acquisition, holding, and disposal of a property to be kept for five years after lodging the relevant tax return. You will need these receipts to calculate your Capital Gains Tax liability and determine if existing capital losses on other assets can offset the gain.
Tenancy and access records
Under Victorian tenancy law, you must provide appropriate notice before ending a tenancy for a sale. When the property is on the market, documentation must reflect that inspection access respects tenant rights, which typically limits open for inspections to no more than two per week with reasonable notice.
The land tax liability
For sale contracts below the 2026 adjustment prohibition threshold of $10.7 million, sellers cannot require buyers to contribute to land tax at settlement. Sellers must absorb the land tax costs up to the settlement date, making it a fixed cost in your final net proceeds calculation.
Frequently asked questions
How long must I keep records for my investment property sale?
You must retain all receipts and documentation regarding the acquisition, holding, and disposal of the property for five years after you lodge the tax return in which the CGT event is reported (ATO). This ensures compliance during potential audits of your capital gains calculations.
Can I make the buyer pay for the 2026 land tax?
Generally, no. For any sale contract under the $10.7 million prohibition threshold, the seller is responsible for land tax up to the settlement date. You cannot require the buyer to contribute to this cost at settlement for properties below this value.
What are the rules for inspections when a tenant is present?
Victorian tenancy laws protect tenant privacy and quiet enjoyment. You must provide reasonable notice before any entry, and open for inspections are typically limited to a maximum of two per week. These restrictions must be managed to avoid legal disputes during the campaign.
What documents do I need for a short-stay rental sale?
You should provide records of Short Stay Accommodation Levy compliance. Hosts earning over $75,000 per year must show quarterly lodgments starting from 30 April 2025, while those under $75,000 must have lodged by 30 January 2026 (SRO Victoria).
Questions to ask your agent
- How is the increase in investor divestment affecting buyer competition in this specific submarket?
- Which specific rental yield benchmarks are current buyers in this corridor using to justify their offers?
- How should we timing the contract signing date relative to the financial year to optimise my CGT position?
This article contains general market information based on data current as at April 2026. It does not constitute financial, legal, or real estate advice specific to your property or circumstances. For an appraisal and tailored advice, speak with a Fletchers agent in your area.