Does anyone know how to calculate the GCT on a property that was purchase then rented (not lived in first) for 6 years then became a PPR for 6 years?
I believe I calculate the CG on the first 6 years – 2000 – 2006 but how do I calculate the figures for what the property was worth in 2006 for tax purposes? Eg it was purchased for $127,000 and is now worth approx $500,000
Is it a calculation of the gains over the 12 years and then divided by two or can I get someone to calculate the approx price of the property at this time ? Like a depreciation agent or real estate agent and will the ATO accept this ?
I am thinking of purchasing my husbands half of the property so that we can potentially free up some capital to buy a new PPR to live in? But with the CGT make it worth while?
As you rented the property out first and then lived in it, to calculate CGT you need to work out the percentage of the time it was an IP and use that with the total gain to work out what will form part of your taxable return.
Say using your example, total gain was $500K-$127K = $373K, and your IP percentage is 6/12 = 50%, then your CG which is taxable is $373K x 0.5 = $186.5K.
You would also apply for a 50% discount as you have held the property over 12 months, so it will decrease further to $93.25K.
However when you see your accountant, there may be extra expenses that might be added to the cost base and sale of property that could lessen CG further.
Cheers
Tom
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