Can someone advise me please? Some time ago, we purchased a 5 acre block from my parents for $30,000 (approx. half the market rate). They were more than happy with the deal – as a way to help us and to give them some extra cash.
If we sell the land at the market rate now, I guess we will be up for a hefty CGT bill?
Is this vacant land – CGT is assessed on the increase in value (with some other factors thrown in) and you pay tax on the Capital Gain dependant on the marginal tax rate bracket you fall into.
There have been lots of CGT type questions and answers posted here in the past. Have a look back through or have a look on the ato web-site
Shirley,
You pay CGT on the profit on sale.
When working out your profit you need to subtract all expenses.
Ensure you include all costs such as buying and selling costs, all holding costs inc interest. Also the costs of any maintenance or repairs on things such as fencing etc.
Best to speak to an accountant.
Cheers,
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
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