Browse Forums Real Estate Re: Capital Gains Tax on Sale of Property 5Mar 12, 2012 10:55 am Thanks for your responses - appreciated. Yes I will be checking with my accountant - it is just that I like to get a 'feel' for this sort of thing first so I know what sort of questions to ask. The property prior to wife inheriting her equal portion with the others was privately owned as a holiday residence and acquired back in the 1960's (I think) so not prior to 1958. So the CGT is based on the difference between the the initial inherited value and its sold value - and in their equal proportions and then discounted 50% for holding longer than 1 year. But at what rate is the CGT applied to that capital gain in the first place? All of it or some % of the total gain? Thanks barkly Re: Capital Gains Tax on Sale of Property 6Mar 12, 2012 3:36 pm Sorry that should have been 1985 (not 1958) Got confused with my birthday. haha. OK I'll give an example. Say the property was inherited at $200,000 and is now worth $400,000. So the capital gain is $200,000. Halve it = $100,000. This is very simplified as there are other things taken into account. Say there are 5 people, then each person has to pay tax on $20,000 each. So there is no set rate. The $20,000 is added to your income for the year in which it is sold. So if your wife has no income she will pay tax on $20,000 (not much) whereas someone on a high income will pay a lot more. So if their tax rate is 30% they will pay $6,000 tax. To lessen the tax some people salary sacrifice money to super. There are other ways to lessen the tax also. Re: Capital Gains Tax on Sale of Property 7Mar 12, 2012 6:52 pm ![]() Sorry that should have been 1985 (not 1958) Got confused with my birthday. haha. OK I'll give an example. Say the property was inherited at $200,000 and is now worth $400,000. So the capital gain is $200,000. Halve it = $100,000. This is very simplified as there are other things taken into account. Say there are 5 people, then each person has to pay tax on $20,000 each. So there is no set rate. The $20,000 is added to your income for the year in which it is sold. So if your wife has no income she will pay tax on $20,000 (not much) whereas someone on a high income will pay a lot more. So if their tax rate is 30% they will pay $6,000 tax. To lessen the tax some people salary sacrifice money to super. There are other ways to lessen the tax also. Yep what Travelbug said ^^ Normally your exempt from any CGT if ; 1. it's bought or inherited prior to 1985 ( 26 years ago) 2. It's your only PPOR from start to finish 3. It's your only declared PPOR as per 6 years rule 4. it was inherited via a will and you sold within 24 month 5. Special approved circumstances ( ie Part of the royal army or reserve etc..) Either way there are ways to reduce or low the CGT if done correctly. Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au Re: Capital Gains Tax on Sale of Property 8Mar 13, 2012 7:16 pm Thanks travelbug and shape, I have now developed a much better understanding of the CGT scene and I do believe my wife will now be subject to the tax. Our accountant will earn his fees at the time it all needs to be assessed. Your responses with the others have been much appreciated. thanks again barkly Re: Capital Gains Tax on Sale of Property 9Oct 29, 2012 11:29 pm What Michael has said is true. I would avoid using valuer general's value from back in the day as it will more than likely be undervalued which will increase your gain. best if you have value established as of probate. to ball park the amount add 50% of the proportionate gain to your taxable income and then look at how much additional tax will be paid. ask you accountant about how you can limit your tax liability and do it before you sell the property. Cheers Mark If you are in Victoria you have a statutory right to your own building inspector regardless of builder's consent. No negotiations are required. However the builder will… 1 13711 ![]() Hi, Does anyone know or has any feedback of HYG Property developers (https://hyg.com.au/) ? I am planning to buy a land from them and don't have much information on their… 0 3714 |