Appreciation

Appreciation refers to the increase in the value of an asset like a house, apartment or townhouse over time.

What is appreciation?

Appreciation refers to the increase in the value of an asset like a house, apartment or townhouse over time. This can occur as a result of numerous factors including improvements in the neighbourhood, growing demand for housing, or general economic growth.

How much does property appreciate each year?

Over the last 20 years in Australia, house and apartment prices have grown by roughly 6% and 4.4% respectively on an annual basis. 

However, this can greatly differ between different locations and types of properties. This figure changes every year, with some periods even bearing a negative capital growth.

Taxes on properties that have appreciated

If you’re selling property that’s appreciated and isn’t your primary place of residence (PPOR), you’ll most likely have to pay capital gains tax (CGT). PPOR’s are not subject to this tax as it's recognised as these properties have not been bought primarily for investment reasons. 

However If you're selling an investment property after one year, only half of your capital gain is subject to capital gains tax. For example, a capital gain of $20,000 would result in only $10,000 being subject to tax. 

What's your property worth in today's market?

Compare your property to recent sales in the area to get a current market estimate.

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