sj oldfield

Can anyone tell me how much Capital Gains Tax I can expect to pay when selling an investment property??????
I have had a look on a couple of websites, but its not very clear.

DianeOZ

Depends how long you have owned it for.

sj oldfield

Bit more explaination than that Di..........

nell1e

Hi

I have some and if I remember correctly its the sale price of the house, minus all costs i.e. purchase cost, settlement fees, estate agents fees, capital inprovements - and then you pay tax on 41% of the profit and all according what tax group you are in will determine what tax you pay - I cannot remember my a/tant saying anything about the length of time you had it - but please check I could be wrong, To be honest this sort of advice would be best from your accountant.

Please double check

Nels

kimi

Hi

I think Nels is close to the mark, but hey check with your accountant before you do anything.

Why are you selling?

K

Alan Collett

I assume the enquirer is in Perth WA, not Perth Scotland ... meaning tax is most likely payable in Australia not the UK (depends on tax residency status).

Maybe request one or two of the free tax factsheets here:
www.collettandco.com

Best regards.

ABCDiamond

If it is an Australian property, and you have owned it for more than 12 months, tax is only paid on 50% of the gain.

The actual tax rate depends on what tax bracket you are on for your other income, as it gets added to your normal income to work out the tax rate.

Alan Collett

Unless the property was a main residence at one time ... when there may be an exemption from paying CGT available ...

Best regards.

kimi

Hi

can you explain more as I thought this but my accountant said NO, the only diffence is in the value it went up at that time you were living in it or something -

Please more info

K

Alan Collett

This is an area where I earn an income, K, so forgive me if I don't go into too much detail. I will only say that there is an exemption for up to 6 years from paying CGT if a taxpayer owns a residence that has been designated as your main residence, is income generating, and so long as there is no other dwelling owned by the taxpayer that is considered to be the main residence.

Best regards.

kimi

Hi Alan

No Worries, but at least you have told me something which I am grateful for

Regards

K

steve99

So it would therefore be wise to sell the property in a year when you dont expect to earn any other income, so as to keep in the lowest tax brackets? ie when you've retired or arent working.

Anyone know if Stamp Duty is one of the elements that can be added onto the purchase price to give the starting figure for calculating the capital gain?

Steve

ABCDiamond

If you can do that, then yes

Stamp Duty, Solicitors Fee, Agents Costs, etc is all taken onto account when working out the profit

I'm actually doing all my figures now, for the one we sold yesterday, hoping it all goes through OK

steve99

Thanks ABC.

Another thought... it could be quite important who's name/names you buy the property in. I guess this is largely relevant to my own situation so it will be different for everyone, but if we were to buy an investment property, we would naturally do it in the same way as we did for a own house, it would be purchased in joint names, I assume that when you then come to sell it the capital gain is effectively split 50/50 so it would get added onto our individual incomes and we'd pay tax at the relevant rate to each of us.

Where as if we purchased it in my wife's name and at some point she stopped working, which unless your very lucky is normally how it seems to work ... we could then look to sell the property at a point when she has no other income and therefore keep in the lower tax thresholds.

Once your claiming your Superannuation is this classed as income in anyway?
Steve