All Topics / General Property / Capital Gains Tax

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  • Profile photo of JayhayleyJayhayley
    Member
    @jayhayley
    Join Date: 2004
    Post Count: 5
    September 7, 2004 - 10:08 am

    Hi There,
    Could someone either explain or help lead me to some info on Capital Gains Tax that will explain it clearly.

    Thanks

    Profile photo of MonopolyMonopoly
    Member
    @monopoly
    Join Date: 2004
    Post Count: 1,612
    September 7, 2004 - 11:08 am

    Hi Jayhayley,

    What exactly do you want to know about CGT???

    It does not apply to the sale of your PPOR.

    It is calculated at the full 100% rate if you sell a property (which has generated income, ie. rent) which you have owned for less than 12 months, after which time, this will be reduced to 50%

    You can turn your PPOR into an investment property, and be exempt from CGT if you sell the property within 6 years of you leaving it, PROVIDED you do not buy another property and claim it as your PPOR in that time.

    Well that’s a start I guess. Sorry, I can’t think of anything else off the top of my head, but if you want to read up on it, go to the ATO website http://www.ato.gov.au and search under Capital Gains Tax; there is plenty in there about it to keep you entertained!!! [sleep2]

    Cheers,

    Jo

    Thanks TerryW, link has been edited accordingly[smiling]

    Profile photo of westanwestan
    Member
    @westan
    Join Date: 2002
    Post Count: 1,950
    September 7, 2004 - 11:33 am

    Hi jayhayley

    i just want to add some things to jo’s comments

    to work out capital gains you work out the selling price less all selling cost- including agents commission and all legal cost. Then you take away all purchase costs, this includes the original amount you bought the property for plus all legal costs and any repairs you made to the home before it become a rental property.
    This will give you your Profit on the home which is taxable as Capital gain. If you have owned the property for more than 12 months you get half the profit tax free. You add the capital gains to your taxable income and pay tax on it as if it was earned income at whatever tax bracket you are now in.

    regards westan

    I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    September 8, 2004 - 6:36 am

    BTW, I think Jo meant, http://www.ato.gov.au

    Terryw
    Discover Home Loans
    North Sydney
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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