avoiding CGT? is it possible

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seank
Member
@seank
Join Date: 2006
Post Count: 64
February 21, 2007 - 12:55 pm
Hi all,
I have a friend who has just had an offer accepted on a property. . Is there any way you can avoid CGT (when you sell) and stamp duty (when you buy)by saying you will be living in the property, when in fact it will be an IP earning income? If so..who do you, and do not, notify ie bank? solicitor? ect I know its dodgy but thought some-one might know a few ideas, and just crazy that the government makes so much money out of property investers.
Thanks guys
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
February 21, 2007 - 1:09 pm
Cannot avoid stamp duty, but CGT is only lived on investment properties in the year of sale when there is a profit. If a person has lived in a property initially, then they may be able to avoid CGT even if the property has been a rental property.
Terryw
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The Contrarian
Member
@the-contrarian
Join Date: 2005
Post Count: 97
February 21, 2007 - 1:46 pm
Terry is right…
Normally you can’t avoid stamp duty…
However if it is their First Home…
You are entitled to:
1. FHOG ($7,000) plus
2. Stamp Duty exemption (actually costs about $20)
instead of $1,000s
I know each state’s rules are a little different…
you have to ofcourse take this up with the office of state revenue.
As for CGT…
If you inherit a property… you don’t pay CGT…
But I’m not going to go there… haha
What’s that saying:
“Where there’s a will, there’s a relative”
Cheers,
anthony.
Richard Taylor
Participant
@qlds007
Join Date: 2003
Post Count: 12,024
February 21, 2007 - 3:25 pm
One way of avoiding CGT is to make the same amount of contribution into your SMSF as you made in the way of Gross Profit on the sale of the IP.
Anything upto $1Mil this year you are fine.
Have several clients who are refinancing unencumbered homes to place the funds into Superannuation and then buy property in the Super Fund.
Cheers
Richard Taylor
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