Hi Guys,
Can someone please let me know in laymans terms how CGT on IPs works for example:
If sold within 12 months from purchase after all expences what is the tax rate in % terms that is lost?
& Is there a period(time frame) that this % is reduced i.e 2 years 1 day etc?
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What ever capital gain you might make from your investment property just gets added to your taxable income for the year. e.g. income from work $47,000.00 income from investment property sale $56,000.00 = $103,000.00 The tax on your taxable income is $35,790.00 Considering you paid tax from your wages of $10880.00 through the year, you would have to pay $24,910.00 tax on that $56,000.00, which would be over 50% tax. So owning the property for more than a year might be worth while for some and not to others, if you believe reinvesting in another property will make you back more than saving that $12,455.00 or 50% of $24,910.00 your mad not to sell and do it all again. I rung the ATO and confirmed this posting this morning ( 132861
> follow the prompts to capital gains ) . If you need to calculate your own taxable income use this ATO site, very useful. http://www.ato.gov.au/scripts/axos/axos.asp?CONTEXT=&KBS=Stax001i.xr4&go=ok
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