Property Investment News | Selling a rental property

Should I sell my rental property to pay off my primary residence mortgage?

Ultimately, this will depend on what stage of life you’re at and the relative costs involved in each option.

Your choices before retirement, for instance, will differ from the best course of action early in your investment journey, with many years ahead to benefit from a steady investment property income.

The performance of the property market will also have an impact on your decision. It may be a good idea to sell your investment property to pay off your home’s mortgage, but that doesn’t mean it’s the best time to go ahead with it, either. On the other hand, if the value of your property is likely to fall in future, you might be better off reclaiming your investment. Whether it’s best to move onto another investment or pay off your home’s mortgage is another question that depends on your unique circumstances.

You’ll also have to consider that your rental property is a capital asset, meaning the sale would be subject to capital gains tax. This can have a significant impact on both the amount of tax you pay for the financial year and your tax bracket.

Just remember that if the intention to sell your property is to pay off another, you’ll need to consider the CGT. Knowing when to pay capital gains tax on a property will affect when you sell it and how much more or less tax you are required to pay. Even a couple of months could mean a significant difference in capital gains tax required, which could extend the length of time it will take to pay off your primary residence mortgage.

If you have any questions, or need clarification on any of the above, please contact Anna Marten, our Head of Property Management, on 9651 1666 or

Important note: Clients should not rely solely on the content of this newsletter. All endeavors are made to ensure the content is current and accurate however, we make no representations or warranties as to the accuracy, reliability, completeness, or currency of the content. Readers should seek their own independent professional advice before making decisions