If you’ve invested in a commercial property for many years and believe it might be time to sell, you need to know how to start the process, and what’s involved. Here’s some of our best tips – and we’re here to help you once you’re ready to take the next step.
- Check Your Taxes – Mitigate Your CGT!
The Australian government has long implemented rules that govern how much tax you’ll be charged based on the capital you’ve generated from your commercial property investment. This is known as a Capital Gains Tax. The CGT is something that all property owners have to deal with – but there are ways to mitigate the amount of tax you’ll pay. The first thing you should do is prove how high your cost base (all expenses plus purchase price) actually is. The bigger the difference between the cost base and the sale price, the more tax you pay.
- Know Your Property Value & Factor in Sales Costs
Before you sell, you have to know the value of the property. Get this assessed independently before you list, and when you list the property for sale, ensure that you know exactly how much it’ll cost you to sell the property. There are legal fees, administrative fees, advertising costs, agent commissions and more to take into account. Factor these costs into your asking price.
- Make Sure You Have No Tenancy Turnover After You Sell
One of the best things you can do to increase the likelihood of a sale is to ensure whoever buys the property, will continue to have money coming in immediately after they purchase it. This means extending your current tenants’ term to a period of at least 2 years. Commercial leases tend to be in five-plus year increments. It’ll be a weight off your back if you can prove to the upcoming buyer that they’ll have money coming in immediately.
Be prepared and get in touch with the team at McGees to help you make the next step forward.