Can someone explain how they work out the capital gain in a simple way. The way I understood is if you live in the propety for one year at least you don’t pay it as well as the following six months. But what if you put it on the market and it’s still not sold?
Also, is 50% of your gained money taxable? I will really appreciate it!
ThanksHi Cana,
If the property qualifies as your PPOR you can live elsewhere (but not your own home) for a period of six years. There is a 6 month window when you can have two PPOR – the conditions are explicitly explained in the ATO’s Guide to CGT available at the ATO website.
Any taxable gains are added to other income sources and taxed accordingly. If you own the property for 12 months or more then any gain is halved and taxed accordingly.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
CGT is not payable on your home. On investment properties, it is basically as following (if held more than 12 months):
gain (less some purchase cost) x 50% = assessable gain.
This is then added to your income, and you pay tax based on your new total income.
So even if you were on the top bracket, then you should not pay more than 25% tax on your gain.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi,
Just wanted to add to remember that the CGT discount is not available to companies, and works slightly differently for Super Funds.
Also, did some quick surfing for you and found the ATO guide to Capital Gains. Click here for the link.
Regards,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Try this as well, but do remember it is only a guide to help you determine which of the two methods should be employed (as the cheaper option) when working out CGT.
http://www.cch.com.au/cgi-bin/cgt00isapi.dll/
Jo
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