Hi Every one,
I have a IP which i bought for 185,00 and i own 150,000 on it.
I have got a valuation on the property and believe its worth 280,000 +.
This is just a questions: If i where to sell the property for 280,000 how much capital gain will i have to pay?
The property is under a company name rather then my own name.
So can any one project if i own 150,000 and sold for 280,000 how much money will i get?thanks
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
Its a little more complicated then that, I would talk to an accountant or Lawyer to get a proper estimate but it works off your Income, So if you have earned 50k for the year which is the average wage then you would be up for around $24,000 the rough formula for CG is: CG = marginal tax rate x half capital gain
Because it is a company the 50% discount doesn't apply for owning it for over twelve months.
As it is owned by a company your company would pay 30% tax on the $280,000 – $185,000 = 95,000 * 30% = $28,500 in the company tax return.
$280,000 – 28,500 tax – 150,000 debt = $ 101,500 proceedsYou need to hold on to some of the proceeds say $30,000 to cover the tax bill owing at the end of the financial year.So you should get your accountant to work this out and then pay the tax bill.
If you take dividends out of the company then the dividends are taxed at your marginal rate.
I would talk to an accountant or Lawyer to get a proper estimate.
oops sorry, I didnt read the company part, Also I forgot to mention is that costs like stamp duties, Newspaper adds, Agency Fees and even if you have payed any Land Tax all take into affect the amout of capital gains tax you pay.
Really I think Capital Gains is wrong, So is paying tax on your so called "Profits" from collecting interest in a bank account. If only you could make inflation a deduction….
i think he said he owns 150K on 185K IP.
so how much money will he get roughly:
profit = sell price – purchase price – cost (stamp duty, agent commision, etc) = 280K – 195K – 10K = 85K
pay 30% tax from 85K, you left with 59.5K + 150K you own on the IP.
so total you would get 209.5K
I think the word OWN should actually read OWE.
Richard Taylor | Australia's leading private lender
It is unusual to own a property in a company alone, unless it is acting as trustee. Johann – is the company a trustee?
If so, the tax treatment will be totally different, the gain will be distributed to the beneficiaries and they may be entitled to the 50% discount if they are individuals – so you should pay a max of 24% tax and probably a lot less.
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
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