Selling your home or investment property can be stressful and expensive if you are not aware of all of the associated costs. Working in the industry for some time, CRAIG WILSON, CEO of PiC Group, shares tips below on what to consider before selling. Knowing and planning for these will make the entire process a lot easier.
What is it going to cost?
Using a property calculator is a fuss free way of making sure you are aware of all the fees – here are some things to consider.
- Sale Price – How much do you want to sell for?
- Agent Commission – This differs for every agent and is generally based on a percentage of the sale price.
- Legal / Conveyancing Fees – You will be inundated with forms, so we suggest its best to get quotes or ask your Agent for a recommendation to help guide you through the process.
- Bank Fees – If you are paying off your mortgage earlier than your loan term you may be up for early exit fee. This varies from bank to bank and depending on the loan you have at the time. Lenders almost always charge a Settlement fee as well to take care of the administration.
- Repairs and Renovations – Budget! Budget! Budget! While it can be tough but best to have some extra money tucked away to complete any repairs or renovations prior to listing the property.
- Relocation Expenses – Moving your house from the current location to your new abode can be costly, remember to get some quotes and consider this into your expenses when selling.
It’s also important to keep in mind that if you are expecting to make a profit from the sale of an investment property, you will need to pay Capital Gains Tax (CGT) which applies to an asset purchased on or after September 1985.
This is calculated by subtracting the costs involved in acquiring and holding an asset from the proceeds the sale of the asset. In short, any profit you make above the cost of acquiring and maintaining the home is considered a capital gain.
Speak with your Accountant about this, they will know all the details to calculate what you might have to pay. If you are selling your principal place of residence, then you are exempt from CGT.
Craig is the founder of PiC Group since 1993 and SiNC Surveys, and a successful private investor in his own right, coming from a background in the insurance, financial planning and real estate development industries.