I’m still bumbling around with this forum stuff and not sure if this was posted in the correct area before, just trying again.[confused2]
Can anyone tell me when negative gearing and claiming the capital allowance, ie. building construction cost write off. (2.5% / 40 yrs) on an IP, is 50% of the amount claimed added to the amount Capital Gain Taxed when the property is sold?
Also is the value of the property indexed with inflation for the CGT calculated?
No what happens is that lets say you bought a property for 250k then over 5 years you claimed 20k in depreciation e.g. construction carpets etc the property then only owes you 230k so therefore if you sold it for 300k your profit is 70k you then get a 50% CGT discount so in this case you only pay tax on 35k.
Before they had the 50% discount on CGT you use to be able to index it against inflation but not anymore.
If you bought the property before the tax rule changed then you can still use the index system but you cant use both so if you use the index system you will not get the 50% discount . If you use the 50% discount you will not get the indexed.
Hope this has helped and you understand what I am saying
We buy properties cash fast settlements no fees no fuss. contact me on 0408 355568
[email protected]Yeh, I think I’m full bottle now.
I guess thats a good reason not to sink too much of your own money into any property.
Thanks heaps for your time Rikky.
Cheers Zig [upsidedown]
No worrie mate thats what we are all hear for
We buy properties cash fast settlements no fees no fuss. contact me on 0408 355568
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