IS IT TRUE WITH COMMERCIAL INVESTMENT PROPERTY, PROVIDING YOU RE INVEST PROFITS BACK INTO MORE COMMERCIAL PROPERTY WITHIN A CERTAIN TIME, YOU CAN OFFSET PAYING CGT? AND DOES IT APPLY TO RESIDENTIAL AT ALL?
MANY THANKS,
SW
[hmm][strum]Hi Cars,
If there is any rental income earned then the property is classified as a passive asset and as such you cannot defer CGT liability.
For a full explanation I suggest a search on ‘CGT deferral’
Please note I am not an accountant and as such more learned comment than mine needs to be sought out.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Cars_SW1012,
I can’t comment on commercial investment properties, however I can tell you (with 99% confidence) that for RESIDENTAL investments it CANNOT be deferred, or avoided.
I should know, I have a $%@#@#% HUGE CGT bill to prove it!!!!![whip][bawl]
For more info check ATO website; it makes for fun reading (not) !!!!
Jo
Thanks Derek,
I was talking to a guy today who bought a building with a bank as tennent and making good return and his accountent told him it is do-able?,
Anyway I will do a search. Thanks for advice,
regards,
sw[biggrin]Was he talking of CGT or GST ????
Now GST is avoided on a going concern, but not CGT.
Momopoly…I like the whipping action[wink]
There is a 1031 exchange in the US, that allows you to reinvest money after selling a property into a more expensive property, without paying CGT (all you do though is defer it).
In Australia there is no law to my knoweldge that would allow you to do that for commercial, let alone residential.
I would be interested if you found out if this guy’s accountant had figured out how to do it… (time for a new accountant!).
Rgds.
Lucifer_auHi Cars,
i have heard this too, about commercial property, i honestly dont know much about the deferred CGT arrangement, but i do believe you must keep the property for a minimal of 15 years, before you sell it, before your able or in a such position for deferred CGT on commercial property.
… but again, talking to my accountant, there not quite too sure, but they have reassured me, that they have heard something like this before, in what ive mentioned above.
Cheers,
sisThe 15 years that SIS mentioned rings a bell, and I believe it has to be owned in individual’s names, rather than other entities. as for exact details, I didn’t pay attention as I was looking at purchasing in the trust’s name anyway….
Cheers
Mel
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