Capital growth is the increase in market value of your property over time. If you keep the investment property, this becomes an increase in equity. But if you decide to sell your investment property, then you will have to report capital gains or losses in your income tax return. This would depend on if you sold the investment home for more or less than its original price. If you have a capital gain and earn a profit from the sale, then this will increase the tax you’ll have to pay. However, if you lost money from the sale, then the loss can offset other capital gains you accumulated in the year, such as from stocks, which can reduce how much tax you owe.