The rental property I have sold still has an unpaid loan balance. I have to pay off this loan, does this reduce my capital gain?
8,153 views
8,153 views2 replies
2 replies
8,153 views
2 replies
Hey @Mike46,
No, paying off the loan won't reduce the capital gains tax you'll need to pay when selling your rental property. CGT is calculated from the price you purchased the property for and the price you sell the property. So, a capital gain or loss is the difference between what it's cost you to obtain and improve the property (Cost base). You'll need to work out the cost base of the property first to work out the capital gain when you sell. Once you've worked out the cost base and if you have a gain then you'll need to report and pay tax on that capital gain.
Still having a loan for the property doesn't come into the equation.
You may like to read more about calculating your capital gains tax (CGT) on our website.
All replies
No.
You're welcome.
Hey @Mike46,
No, paying off the loan won't reduce the capital gains tax you'll need to pay when selling your rental property. CGT is calculated from the price you purchased the property for and the price you sell the property. So, a capital gain or loss is the difference between what it's cost you to obtain and improve the property (Cost base). You'll need to work out the cost base of the property first to work out the capital gain when you sell. Once you've worked out the cost base and if you have a gain then you'll need to report and pay tax on that capital gain.
Still having a loan for the property doesn't come into the equation.
You may like to read more about calculating your capital gains tax (CGT) on our website.
Featured articles
15 Apr 2026 · 4 min read time
15 Apr 2026 · 8 min read time