How soon after buying can you put your home for sale?

Buying and selling property can be time-consuming, but there are buyers looking for a quick turnaround. Property flipping has been a great way for investors to make use of capital gains, while some buyers with buyer's remorse merely want to move to greener pastures. 

While there are no rules stopping you from selling your property immediately after buying it, it may not always make the most financial sense. 

So let’s break it down. How soon can you sell again if you’ve only just bought a property? And what happens to your home loan?

Selling your home isn’t a fast process. According to Domain, most Australian properties in the capital cities sit on the market for roughly 60 to 120 days. 

The timing can vary if you are selling by private treaty or auction since auctions typically take four weeks, while private sales last until a buyer is found. Off-market property selling can also be a quick way to sell since you’re dropping into a pool of exclusive and house-hungry buyers. 

Some suburbs fly off the shelves in as little as two weeks, but from start to finish, selling your home usually takes several months. Your property agent can let you know how long homes take to sell in your local suburb.

No, you cannot sell your property during the cooling-off period. A cooling-off period is the grace period when you don’t quite own the property yet, usually because you have yet to sign the final contract of sale, acquire the property title, and settle your home loan. If you sell during this time, you’ll be in breach and could lose your deposit. 

Some Australian states and territories don’t have a cooling-off period, while others have periods that last up to five business days. Some residential properties may not have a cooling-off period at all, especially if they are vacant, larger than 2.5 hectares, or, most critically, sold at auction. Auctions do not have cooling-off periods, so if your bid wins, you will be waved in to pay the deposit and sign the contract. 

If you need to sell again quickly for whatever reason – perhaps you overbid at auction – talk to your solicitor to discuss your options. 

However, once the cooling-off period has passed and you officially own the property, there’s nothing to legally prevent you from selling again.

Depending on your situation, it may be better to sell your property quickly. Common reasons for wanting to sell quickly include:

• Paying off a home loan, especially if you just bought a new place. 
• Divorce. 
• Downsizing. 
• Financial difficulties, such as a distressed sale. 
• Dangerous or unlivable conditions in the property. 

Selling your home quickly is mostly worth it when time matters more to you than money. Vendors looking to sell in a hurry may have to compromise on price to pull in buyers since a cheap deal sells faster than an average one. But if you need to move fast, peace of mind can sometimes be worth the lost markup.

Keep in mind, however, that how quickly you’re able to sell your home often depends on a number of factors outside your control. For example, if home sales in your area are slow, your property may sit on the market for longer. There may be less buyer demand due to high costs, especially if home loans are expensive or property prices are too steep. 

If you plan to flip your property, you may run into construction delays. The turnaround for flipped houses and units can be anywhere from three to twelve months, depending on the investor’s experience and the availability of labour and materials. 

You may also run into cost difficulties. If you’re buying and selling at the same time, there could be a period where you’re financing multiple mortgages, and if you don’t have enough home equity built up to potentially fund a new deposit, it can slow you down. If you own a property for less than twelve months, you will likely also have to pay capital gains tax at the full rate. 

Talk to your solicitor and a financial advisor to see what works best for you. 

You can use a few solid tactics to sell your home quickly. While moving property can be slowed down by things like conveyancers, paperwork, and cool market conditions, you can help things along by:

• Setting a reasonable price for your property type and suburb. Overpriced properties will sit on the market for a long time, so look at similar properties in your area and sell at a price that competes with those values. 
• Putting your best foot forward. Clean the house and make quick touch-ups, repairs, and renovations. Now is the time to finish all those incomplete projects. 
• Listing the property effectively. Advertising is half the battle when putting a home for sale, so invest in good photography, target your audience to specific kinds of buyers, and list the property on as many different real estate platforms as possible. 
• Selling off-market. Many buyers are keen to buy just as quickly as you want to sell, so going off-market can be a smart way of parting with a property quickly.

All of these can help make your property more attractive to potential buyers while protecting its value.

There are a lot of benefits to selling a home before buying a new one, but there are also upsides to buying first. The timeline will depend on your finances and needs, and whether you can handle moving multiple times.

For instance, selling before buying can be a good idea because:

• You’ll know your buying power.
• You’ll have the money to finance a new property.
• You can discharge your mortgage. 

On the other hand, buying before selling may be better if:

• You want to avoid renting an ‘in-between’ home.
• You can use your equity. 
• You want to sell at a time with better capital gains.

Selling a home can involve costs, too, including capital gains tax, so talk to a financial planner to strategise the best timeline for you. 

If you sell a property with a home loan, you will need to discharge your mortgage first. This process removes your mortgage (sometimes called an encumbrance) from the property title and closes down your account. Once your mortgage is discharged, you can put your home for sale. 

You may need to have a solicitor guide you through the discharge process. Break fees or discharge costs from your lender may apply.

One of the main drawbacks to selling your property within twelve months of buying is that you will be charged at the full capital gains tax rate, unless you have an eligible exemption. 

The vast majority of residential property sold in Australia is liable for CPT, but if you hold the property for a year and then sell, you may be able to claim a reduced CPT rate using with the discount method. 

The discount method adds a 50% discount to any capital gains made on the sold property. So, if your property makes a profit of $200,000, only $100,000 will be added to your taxable income for that financial year. 

Compare home loans in the table below.