Actually just taxes. I am completely new to this property game, haven't bought anything yet either, and won't until I have some money of my own. I am currently 18 and I am wondering what are the taxes associated with buying and selling a property? I have heard stories of American Millionaires because they could "Flip" property, is it the same in Aus? What is capital gains tax? Could someone explain it in plain english please.
What sort of legalities am I going to be going into if I get into real estate? I have googled looking for these answers, but no success.Thanks,
James.
jrws wrote:What is capital gains tax? Could someone explain it in plain english please.Thanks,
James.
Hi James
Welcome to the forum.
Here's some info on CGT – taken straight from the horses mouth – http://www.ato.gov.au/corporate/pathway.asp?pc=001/001/038
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
If your intention is to purchase and improve these assets with the intention of ‘flipping’ them then capital gains tax will not be applicable as the profits will be assessed on revenue account not on capital account. This means that things like the 50% general CGT discount are not applicable as the profit is not assessed on capital account.
Also need to be careful re ‘substantial improvements’ to the property and whether GST will apply to the sale of the property if ‘substantial improvements’ have been made.
Net Profits would be added to your taxable income and you would be taxed at the appropriate tax rate.
Thanks muchly for the replies, I hope that I will be able to actively contribute one day
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