Forum Replies Created
Thanks Michael,
Do you have their details handy?
regards,
Firstly, is the property solely in your name now? Assuming it is.
Yes it is solely in my name, I have got this property before we get married.
CGT wll be payable on the sale price less value at the date you moved out of it you moved out of it, so roughly $600k – $580k. Less fees such as stamp duty etc. 50% discount on CG too. So probably little or no CGT will be payable.
Thanks that's what I really want to hear, but how do I prove my property is worth 580K at 2010 Jan to ATO? It is a 2 bedder apartment in sydney CBD with car park.
Your husband can buy your property and borrow to do so. If the house is a rental then he should be able to claim the whole of the interest borrowed.
Yes it will be rented out in the future.You still have to watch out for the ATO applying Part IVA Tax Act and saying this is a scheme with a dominant purpose of tax. Maybe it is for estate planning reasons instead?
Yeah, by doing this it will release most of our equity in that investment property, plus my husband is on the top tax rate of 37%, and I do no have any income. I should speak with my accountant about this.
Stamp duty would depend on the state the property is located in. In NSW stamp duty would be payable I think. In full. In Vic you may be exempt.
Yeah we are in NSW, but if stamp duty is fully deductible on tax, then we can claim 37% back in the first year.
I have also assumed this is not being done as the result of a divorce or family law settlement – if so there would be no CG and no stamp duty probably.
Yes you are right, we are only doing this to give my husband a better negative gearing opportunity for tax purpose. lol ,,
Otherwise I will have 170K un deductible debt.Thank you so much for the detailed response.
BelindaW
You will have to do the calcs yourself as your post doesnt really make sense (you said you purchase the property in November 2009, lived in it for 14 months and then rented it out on January 2010).
Sorry my mistake, I purchased the property at November 2008 not 2009. and lived in for 13-14 months and rent out on 2010 Jan.
But I don't know how to do a calculation on the value of my property, I can only roughly say it will be around 580K at 2010. What sort of evidence that I can get to prove my property is worth 580K at 2010 Jan for CGT calculation purpose? and advice on that?
As price didn't went up much during 2010 until now, so I wont be paying much tax on CGT. Plus I am a housewife with no income, i guess having this investment property doesn't give me any sort of tax benefit. And my husband is on top tax rate at 37% with his income, therefore probably by transferring this property to him will get more tax benefit in the long run. As the property is negative geared at 20000 per year.Hi there,
In my opinion it is always good to have IO with offset account for your IPs. As money will be more flexible, and we aim for capital gain therefore not much of point of paying down the principal, as it will reduce your tax benefit as for negative gearing. Plus you could always leverage your equity in buying new properties.
As for property type, according to theory and past experience in long run house does have a better growth in capital gain then units and apartment. According to your situation it really depends what you want, if you go for property with better capital growth you will have to bear more costs in short team, but it will give better portfolio on the future. But in current market, anything could happen, I guess property value might not increase much in next few years, who knows… but if you are to invest it for over 15 years, i don;t see any trouble.
