Selling a property involves two dates that can be months apart: the day the contract is made and the day it settles. For capital gains tax the contract date usually counts. This guide explains the rule, the cases where settlement matters instead, and why the valuation date for other events is different again.
When does a sale happen for capital gains tax?
Selling a property is CGT event A1, the disposal of a CGT asset. Section 104-10 of the Income Tax Assessment Act 1997 says the time of the event is when you enter into the contract for the disposal or, if there is no contract, when the change of ownership occurs.
The ATO gives the example of a contract made in June and settled in October: the gain is made in the income year the contract was made, not the year of settlement. For a former home that was rented out, it says to report the gain, loss or exemption in the year of the contract date, not the settlement date.
If a contract falls through before completion, a note in the Act says the event does not happen, because no change of ownership occurs.
What about buying?
The ATO says that when you buy real estate under a contract, your acquisition date is the date on the contract, not when you settle. For inherited property, the acquisition date is the date of death.
Where does the contract date matter for a valuation?
Most sales at arm’s length use the actual price, so no valuation is involved. The contract date matters when market value replaces the price:
- A sale to family, or to a related company or trust, not at arm’s length. Section 116-30 uses market value worked out at the time of the CGT event, which for a sale under a contract is generally the contract date. See family transfers and company or trust transfers.
- A transfer with no contract, such as a gift. The time is when the change of ownership occurs.
- A transfer to an existing trust. The Act sets the time as when the property is transferred (section 104-60).
- Counting days for a partial exemption. For a rental property that later became your home, the ATO counts the days you owned it using the contract purchase and sale dates, not settlement dates.
When does settlement matter instead?
Not every rule uses the contract date:
- The two-year rule for inherited homes. The ATO says the property must be disposed of under a contract that settles within two years of the death. See the two-year rule.
- Days for an inherited home that is only partly exempt. The ATO counts the days from the death until settlement of the sale.
Because different rules use different dates, tell us both the contract date and the settlement date, and your accountant confirms which one to value at.
Why are other valuation dates different?
Many CGT valuations have nothing to do with a contract. The date is set by the event itself:
| Situation | Valuation date |
|---|---|
| A home first used to produce income, where section 118-192 applies | The day it was first used to produce income |
| Inherited property, where the date of death value sets the cost base | The date of death |
| Property held across 30 June 2027 by an Australian resident individual or trust | Just before 1 July 2027 |
| A self-managed super fund’s annual accounts | The 30 June the accounts are made up to |
See every CGT valuation date explained for the rule behind each one.
What should you tell us?
- the contract date and the settlement date, if there was a contract
- the date of the transfer, if there was no contract
- which date your accountant has asked us to value at
We value at the date your accountant gives you, current or past. If your accountant wants values at two dates, the second date goes in the same report for $149 including GST. Request a valuation, or see pricing.
We value property. We do not give tax advice. Your accountant confirms which date applies to you.