Good Afternoon.
I have a property that I purchased in Victoria in Sept 05 with settlement taking place in December 05. The question I have is very simple, but I am struggling to find out the correct answer (I’ve asked a series of friends who have IP’s, and yet Istill feel like the ‘Millionaire’ contestant who asks the audience a question and gets Options A, B, C & D as the possible answer – they have been no help at all!). I bought this IP with the intention of renovating it and selling it after the CGT discount cuts in.
My question is:
does the 50% CGT discount cut in after 1 year from the PURCHASE date or one from the SETTLEMENT date.I trust someone out there in PropertyInvesting-land knows this one for a Victorian property.
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Thanks,
Gerry G.
Option E. I thought 12mths and 1 day from the exchange date.
RoboCapital gains is calculated from the date of the contract which you said was Sept 2005, so long as you sign a contract to sell the property after Sept 2006 you’ll get the 50% discount. However its a 50% discount on the profit which will be quickly eroded with interest over the 12 month period. If the result is a loss this is treated as a Capital Loss and can only be offset against future capital gains.
Hope this answers your question. (Retired Tax Accountant)Amanda
“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”
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