A positvely geared property has become a negatively geared property with rising interest rates ,falling rent in a saturated market and repairs. I would like to sell this property but capital gains tax would eat up my profit. Is there any way that I can minimize capital gains tax as I would like to buy a property in another town. I have made many bad financial decisions in the past and am still paying dreadfully for them.
I need investments for super in eight years time.Tro,
1. Are you claiming depreciation benefits on the property? If not, this may assist in returning the property to cash flow positive.
2. You mention repairs – not sure whether they would fall under repairs (for wear and tear and deductible) or of a capital nature for tax purposes. If you keep, a tax depreciation schedule would take this capital works deduction into account or if selling, reduce cost base for CGT.
3. You mean the property is now cash flow negative. Nothing intrinsically wrong with that. Do you need to sell? CG only paid when you sell? Is there anything intrinsically wrong about the property ie location, type etc
4. If you do need/want to sell – acquisiton/disposal costs may reduce cost base for CGT purposes
Tro
Can you not use the increased equity to borrow against to fund the CF+ properties? If it has been a good growth property, be careful about selling if you wish to ‘cash in your chips’ in 8 years. If you can find some CF+ properties, they could balance each other out, and as James said, get QS done to reduce the outflows also.
Cheers
Mel
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