Hi all,
Hoping someone can provide me an indicative figure of how much CGT i may be up for given my situation.
I purchased a unit december 2008 for $326k
Sold it november 2016 for $491k
I lived in it from december 2008 until december 2012 and let it for the remainder.
Taxable income is about 100k p.a.
I've been trying the online calculators and just can't figure it out! One indicated $40k but understand i may get a reduction for the period i lived there?
Thanks all
Hrmm around then i would have as changed financier.
As I recall, you don't pay CGT for your single residential property, so if you bought in '08 for $326, leased out in '12 when it was worth (for example) $400, and sold in '16 for $491, then you'll pay CGT on the $491 - $400 = $91k profit, which works out to be somewhere between $20 - $25k.
Bear in mind that this is not even a back-of-a-beer coaster calculation.
Thanks mate. Noted and will see if i can't hey some info and uograde to "beer coaster" status!:)
pay the money and go to an accountant…..
Of course I'll be going to one! Just figured I'd wait til a bit closer to tax time but maybe not. Only looking for a rough idea.
And don't forget adding back all the depreciations if have claimed before….
It really depends on whether that property was considered as your main residential, if it is, then you are exempt on all cgt, even if you leased it out (for under 5 years). You are only liable for cgt if:
1. It was an investment property
2. The property was rented out for more 5 yrs.
Hope this helps. :)
Let me know if I'm wrong, for home owenr,, cgt will always apply to you if you claim mortgage interest dedudctuin for the period of property rented out?
That's not always the case. CGT is only applicable if you rent it out for more than 6 years (my bad previously, forget it was actually 6 and not 5), then it would prorata the amount of time you leased out the property and the time you spent living in it.
https://www.ato.gov.au/General/Capital-gains-tax/In-detail/R…
If it was solely your own home (main residence) then it is totally exempt as long as you don't rent it out for more than 6 years, regardless of how much deductions you claimed during the period of rental.
And if it is an investment property then you are 100% taxable on the cgt.
But then I'm no professional, so it is best to get it sorted with your accountant. ':)
just want to be clear, not trying to dodge paying tax which i will need to. just wanted an idea of what i'm up for. think i have one now so thanks all :)
Provided you did not purchase another property in your name and live in it after December 2012 you wont have to pay any CGT. Even though you rented the property after December 2012 it can still be considered your principle place of residence for up to 6 years, avoiding a trigger of CGT.
If you did buy another property and resided in it then you will be liable for CGT. From the sale price you need to deduct a fair value of the property from December 2012. I dont think that needs to be an official valuation, comparable sale evidence should be sufficient. Im pretty sure you can deduct your selling costs too eg. REA commission, conveyancing costs and any bank fees etc. Then because you held the asset for more than 12 months you are entitled to a 50% CGT discount. Basically take half of the amount, then add that to your personal income for the current tax year. The individual income tax rate will be applied.
So if you sold it for $491K, estimate value in 2012 at $411K (guess). From the $80K difference deduct any costs, again a guess $10K. That leaves $70K, apply the 50% discount, $35K will be added to your taxable income of $100K where you will be taxed 37% on the additional $35K, which is roughly $13K.
Obviously if you can have the value at December 2012 and your selling costs maximised it will reduce your capital gain and tax.
Thanks for the info. I did buy another one and live in it. Sorry as should have been more clear.
Edit: now i read your full response and see you covered both scenarios. Thanks again :)
No CGT payable. Just need to make sure you have all the paper work done properly.
Did you get a valuation when you changed it from your residence to a rental?