Wave the Sails

If you bought a block of land and built on it how long would you have to wait to sell it to pay minimum tax?

Does the same rule apply if you bought an existing property and renovated it?

Cheers in advance

ABCDiamond

Would it be a residential property or Investment ?

In "Basic" terms
Residential = No tax
Investment = keep one year to half the amount taxable.

Wave the Sails

It would be for investment. How would they know we weren't living in it? Stupid question probably!

So what are the scales for tax over several years?

ABCDiamond

Have a read of this : http://www.ato.gov.au/individuals/co...tent/36887.htm
bearing in mind: In general, your main residence (your home) is exempt from capital gains tax (CGT).

Any capital gain that you make is added to your main income and then tax is calculated per standard tax rates.


EG: say you earn $50k, your tax would be:
First $6,000 at 0% $-
Next $15,600 at 15% = $2,340
Next $28,400 at 30% = $8,520
Total tax on $50,000 = $10,860

Then assume you make $50k profit after holding the investment for 12 months.
$25,000 of it is taxable resulting in the following calculation:

First $6,000.00 at 0% = $-
Next $15,600.00 at 15%= $2,340.00
Next $41,400.00 at 30% = $12,420.00
Next $12,000.00 at 42% = $5,040.00

Total tax on $75,000.00 = $19,800.00

Wave the Sails

Thanks very much that makes it clearer!!