Buy low, hold, sell high. Capital growth is the main reason people invest in property. But it's not a guaranteed straight line — here's what you need to know.

The Simple Formula

Buy an asset. Hold onto it while it increases in value. Sell it and use the proceeds to pay off your debt. That's capital growth in a nutshell.

A $500,000 investment property growing at 7% per year would be worth roughly $983,000 after 10 years. Meanwhile, if you've been making loan repayments, the debt has been coming down. The gap between the property's value and the remaining debt is your equity — and it can be used to accelerate your debt reduction.

The Reality Check

Property doesn't grow by 7% every single year without fail. Some years it doubles. Some years it goes backwards. Projections are just that — projections. Always run scenarios with lower growth and higher interest rates to stress-test your numbers.

Capital Gains Tax

When you sell an investment property for a profit, the government wants its cut. If you've held the property for more than 12 months, 50% of the capital gain is added to your taxable income in the year you sell.

On a $300,000 profit, that means $150,000 gets added to your income. If you're already earning $80,000, your tax bill that year jumps significantly. After CGT and real estate commissions, that $300,000 profit might be closer to $220,000 in your pocket.

Still Worth It?

For many people, yes. Property investment is a long game. The combination of capital growth, rental income, and tax deductions can be a powerful wealth-building tool — if the numbers stack up. The key word is "if". Do the maths before you commit, and always talk to an accountant.