I am looking at an investment opportunity with 10% down, nothing more until completion. As an investment I would be counting on capital gains over the next few years until completion. If I sell before paying the remaining 90% would I be taxed on all potential capital gains ? Eg if I “bought” at 500,000, paying $50,000 deposit then 3 years later the going rate for the apartment is 600,000 would I be liable for tax against the paper 100,000 increase ?
Thanks
ElaineYou would be liable for tax on the full gain contract price – $100,000 in your eg. But if you had more than 12 months between buying and selling (contract dates) you would be able to claim the 50% reduction, so would only have to pay tax on $50,000.
Terryw
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