Selling an Investment Property in WA: Tenants, Timing and Tax

You can sell a WA investment property with the tenant in place or vacant. A fixed-term lease continues after the sale, so a tenanted sale suits investor buyers, while selling vacant opens the market to owner-occupiers but costs rent during the campaign. Capital gains tax usually applies to the profit, with a 50% discount for individuals who have held the property for more than 12 months (ATO). Get tax advice before you set the sale date.

Should you sell an investment property tenanted or vacant?

Tenanted: the buyer takes over the lease, so you keep earning rent but mainly reach investors. Vacant: owner-occupiers can buy, often a deeper pool in family suburbs, but you lose rent and need the tenancy to end lawfully first. The right choice depends on who is most likely to pay the most for your property. A good agent models both before recommending one.

What happens to the tenant when a property is sold?

A fixed-term lease continues on the same terms with the new owner. The bond stays with Bonds Administration. If the lease is periodic, the tenancy can only be ended in line with WA tenancy law, which is changing under the rent reforms; check the current rules with your property manager (Consumer Protection WA).

How do inspections work with a tenant in place?

WA tenancy law sets the notice and conditions for showing the property to buyers. Good communication matters as much as the rules: tell the tenant early, agree inspection times, and keep disruption low. A cooperative tenant keeps the home presentable; an unhappy one can quietly undermine the campaign.

How much capital gains tax will you pay?

CGT is worked out on your capital gain: broadly, the sale price less what the property cost you, including purchase costs and some capital spending. Individuals who held the property for more than 12 months can generally reduce the gain by 50% before it is added to their taxable income (ATO). Depreciation you claimed can affect the calculation, and the timing of the contract date can move the gain into a different financial year. Ask your accountant to estimate it before you list.

Do Australian sellers need an ATO clearance certificate?

Yes, in practice. From 1 January 2025, foreign resident capital gains withholding applies at 15% to the value of all property sales, with no minimum price (ATO). If an Australian-resident seller does not give the buyer an ATO clearance certificate by settlement, the buyer must withhold up to 15% of the price and pay it to the ATO (ATO). Apply online early; your settlement agent will ask for it.

When is the best time to sell an investment property?

Consider the lease end date, the market, and your tax position. Listing near the end of a fixed term gives you flexibility to sell vacant or tenanted. The contract date, not the settlement date, usually determines the financial year for CGT, so plan with your accountant.

How do you prepare a tenanted property for sale?

• do a condition inspection early and fix small defects
• agree a cleaning and presentation plan with the tenant
• book professional photography when the home looks its best
• give investor buyers the rent, lease terms and outgoings up front

Should you sell, hold or improve?

Sometimes the better move is to keep the property, update it or adjust the rent. Our guide to maximising rental returns helps you compare. Request a free appraisal and we will give you both a sale estimate and a current rental appraisal.

Frequently asked questions

Can I sell my rental property with tenants in it?

Yes. A fixed-term lease continues with the new owner, so tenanted properties are often sold to investors.

Do tenants have to allow inspections for a sale?

WA tenancy law allows inspections for prospective buyers with the required notice. Agree times with the tenant to keep the campaign smooth.

Do I pay capital gains tax on an investment property?

Usually yes. Individuals who held it more than 12 months can generally apply a 50% CGT discount. Get advice from your accountant.

Is it better to sell vacant or tenanted?

It depends on the buyer pool. Vacant homes reach owner-occupiers; tenanted homes keep income and suit investors.