Just wanted to know how much CGT would my wife and I be up for after selling our investment property in Newcastle (we live in Brisbane) which prior to our move to Qld was our primary residence for 4 years. My wife does not work and the property, just like our home, was in both our names. We had an evaluation done on our Newcastle home as part of the formalities for reborrowing for our Brisbane home. Could anyone please give us a rough idea of how much Johnny’s gonna hit me up for? It would help if you answered in plain English and in words of no more than two syllables!
DaveMan
Possibly nothing! if you move out of your main residence, for up to 6 years, then you can still treat it as your main residence, even if rented. If you sell wihtin 6 years of moving out, then you can pay no tax.
If you are claiming Brisbane as your main residence, then you have to chose which one you want as your main residence during the cross over perio. You can only have one main residence, except for a 6 month period when you can overlap.
If the above doens’t apply then:
(Value at date you moved out) – (Sale price) = profit.From this profit you can deduct costs such as stamp duty, agents fees etc. And you must add back any depreciation claimed. = Net profit.
If you have held it more than 12 months, then this net profit is divided into 2 (ie 50% discount).
This is the taxable capital gain.
This taxable gain is then divided into portions as per ownership. Usually 50/50.
So 50% of the CG goes into the husband’s salary and 50% onto the wife salary.
You then pay income tax on your new yearly salary.
Terryw
Discover Home Loans
Mortgage Broker
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
You must be logged in to reply to this topic. If you don't have an account, you can register here.
