Seems like Sydney is still setting records. The neighbours of my parents IP smashed the townhouse’s complex’s record by $150k at auction yesterday selling for $1.45m for the same exact townhouse but better renovated inside. Couldn’t fathom the amount they got for it and now thinking my parents should sell end of this year or maybe end of next year? They definitely want to sell before EOFY 2019.

Thoughts?

Benny wrote:

Hi Parky,

Thanks everyone for all your answers and I definitely will pass this info onto my parents. I had a bit of a read and their previous PPOR is also eligible for the ‘indexation method’ of calculating the CGT as it was purchased pre September 1999.

That is a VERY important point. I always did think that the Indexation Method was a far more fair way to calculate the CGT.
Over the last 16 years, I have seen virtually nothing of the “Indexation Rate” that used to be regularly published until the new CGT calculations in 1999 commenced. I’m sure their accountant would be a full bottle on all of that though.
And Parky, your comment reminded me of yet another possibility – this one is from so long ago, that we tend to forget. I am one of those lucky enough to have bought my home pre-CGT (we bought in early 1984) so, on sale, we pay NOTHING in the form of a CGT. If your folks are my age, they might also have bought in a pre-CGT time (was it 1985 it started? Not sure…)
Benny

They purchased in early 1999 and moved out at the end of 2013. So it has been an IP for about 3 years now. Do you think generally the indexation method works out to less CGT then the 50% CGT discount?

Also I think the RBA will cut rate 2 more times next year which will keep the property market still quite warm in Sydney at least.