Capital Gains Tax (CGT) is the tax payable on the profit made from selling an asset, like an investment property. It’s not the full sale price taxed, but the difference between what you originally paid for the property (including purchase costs) and what you sell it for (less selling expenses).
As of December 2025, in Melbourne’s Eastern Suburbs, understanding CGT is a key part of the selling process. Typically, sellers engage accountants to calculate their potential CGT liability. If you’ve owned the property for more than 12 months, you’re generally eligible for a 50% CGT discount. However, this doesn’t apply to properties held for shorter periods. Preparation for sale, such as styling (currently costing Melbourne sellers $2,000 – $8,000) and marketing ($3,000 – $8,000 for a full campaign), can be included as selling expenses, reducing your taxable capital gain. Fletchers’ comprehensive property appraisals in 2026 consider potential CGT implications when establishing a realistic price range, helping you realise the net proceeds. It’s important to note that CGT rules are complex, and changes are announced – for example, adjustments to the discount rate are slated for 2027.
Calculating and understanding your potential CGT liability is crucial when considering selling an investment property in Victoria.