Hi,
I’m looking at selling a property that I have half a stake in.
I previously lived in the property and moved out in 2002, where my family continued to live in the dwelling.
If I was to sell this property now, I assume I would sill have to pay CGT, regardless to the fact that I have not made any money out of the property during this time.
So my questions are :
1) Am i under the false assumption that I have to pay CGT? considering the situation?
2) If I have to pay CGT how is this calculated, I assume it’s as follows :
I left in 2002, so the value of it then, lets assume 400,000, deducted from it’s sale value e.g. 600,000
600,00-400,000 = 200,000 – difference in figures
200,000 / 2 = 100,000 – half ownership in the property
100,000 / 2 = 50,000 – standard 50% discount on CGTSo I assume I should be paying tax on 50,000 ?
3) How do they evaluate the estimated value of the property, e.g. in 2002?? Is it based on the Rates evaluation?
Thankyou for your time.
Did you buy another PPOR when you moved out, or did you rent? If you subsequently bought a PPOR, when did you buy?
Yes I did buy a Property that I lived in at the time I left in 2002.
Thanks for your reply.
Hi
I am not an accountant, but….
1) SInce you lived in the property before renting it out, you could still possibly claim it as your main residence – and sell it CGT free. But since you have purchased a new property, this changed things a bit. You can only claim one property as your main residence. So if you claim the first one, then the second property could not get the CGT exemption during the overlap period.
I think you can have a choice on which you chose – maybe the one with the least growth during this period! But remeber, property 1 you only own 50%, property 2 maybe 100%? – so maybe more tax when you factor this in.
2) I think your figures are good, but you also need to take into account buying and selling costs – such as stamp duty, agents fees, legals (buy and sell).
You will also need to add back any depreciation that was claimable – whether you claimed it or not I think.
3) you could need a valuer to do the valuation – as it would have been then – maybe tell him/her what it is for as the higher the valuation, the less tax.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You're assumptions are pretty much correct, but remember to deduct the selling fees from the amount you received for your share of the property. YOu would also need to justify your valuation of the property, at the time it ceased to be your PPOR.
Also, you say that family were living in the property. Were you receiving any rent? If not, you can add your share of interest, council rates, water rates etc into the cost base as well, from the period when it was not your PPOR.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
