Rolling Capital Gains

While there are ways to minimise your tax obligations that you should discuss with your accountant, this is unfortunately not one of them in Australia. Well at least not in the way Robert Kiyosaki talks about in his books. That is specifically an american tax rule. Here you have capital gains tax.

At least that's my understanding on it. If someone can correct me, I'd love to be proven wrong…

The ATO base Capital Gains/Losses on an event.

Ie: the financial year you sell an investment property triggers the Capital Gain event and must be paid that year.

  The only hope you have is that in the same financial year you make an equivalent capital loss by selling an investment that lost money.

   For instance if you lost a heap of money in the stockmarkets this year, it would be a good year to bring forward the sale of an investment property. This would result in a tax year where they may cancel each other out.

 I heard the americans pay no capital gains on the sale of their own PPORs but can still claim any house repayments as a deduction against their income… and they still crashed the system.  Go figure.

or the other way is to never ever sell. and then you never pay CGT in your lifetime.

Simply draw money out of the houses with more and more loans (search "living on equity")

This is a very cool theory if done with caution.

….. ideally leave the properties with huge debt and huge capital gains to your least favourite relative. HA.

I.P.

     Isn't it funny how the ATO demands money immediately when you make a profit, yet are happy to let you off for a few years when you lose.    

   And as a Victorian I also know the roughly shoved pineapple that is Land Tax. Those poor yanks…..

dcn,
   Capital Gains Tax is twice as bad for company owned assets.

  If you make a Cap. Gain with your own property investmentsyou get a 50% discount if you owned them for over a year.

   If they were owned in a company you would get no discount. Paying twice as much.

  The only way to not pay any cap. gains on a   property is if it has been your principal place of residence since purchase. But if this is the case, you would never had any of the benefits of negative gearing while you acquired it.

  C.G.T liabilities are not often taken into account by the average investor while building their portfolio, often only attended to when they sell.

      It is easy to keep using equity to borrow for multiple properties, just keep an eye on your cap. gains liability as each property increases. Because you could find that if you did sell the whole lot, you may have no money left + a huge cap gains debt to gov't. 

    If it is owned by a Discretionary Trust you will hopefully distribute the gains amongst the beneficiaries with the lowest tax bracket to MINIMISE the tax you are required to pay. New rules make this harder with a Hybrid Trust.

   Tax AVOIDANCE, where you illegally avoid taxes that you have to pay is viewed very unfavourably by the ATO (including jail time in some cases)… it also tends to annoy investors who are paying their share of tax.

   Personally I think we pay too much tax here in Australia, it is well above the western world average. The problem with Aussies as a collective is that we just take whatever crap the gov't dishes out.

  "what can we do, it's the government. They can do whatever they want" they'll say.

     –well in France or Greece for instance, if there is unjustified tax hikes there is riots in the streets and massive action.

dcn,
    tax minimisation is absolutely the goal. No-one should be paying more tax then they have to, that is crazy.

   You are clever to continually question to get to the bottom of the matter. 

  CGT is a massive cost to investors and is worth investigating.

   The best approach i have come across is to amass a huge debt, incur a huge tax liability and live like a king. Just make sure you die before the banks or the ATO ask for their money back.