Capital Gains Tax Discount Start/End Date (Residential Property)

jmal4580 on 17/04/2020 - 14:22

Hi OZB Fam! I hope you are keeping safe.

A quick question on the CGT discount 12 month period calculation for a residential property purchased in 2019. I have struggled to find a black & white answer. (Seeing my accountant on Wednesday next week (22nd April) when he re-opens his office for the one day a week) Would appreciate some indicative advice over the weekend

I understand the disposal of a CGT asset is calculated when you "Enter into the contract for disposal" I.E the date when the contract is signed with a purchaser to sell? https://www.ato.gov.au/General/Capital-gains-tax/Selling-an-…

I cannot determine when the acquisition of a CGT asset is calculated. I.E - Is it when I signed the contract on Auction day the 12 month period starts? Or is it when I settled on the property?

TLDR; Essentially I would like to know - If we bought a house at auction on the 11th of May 2019 and settled 24th June 2019. What is the earliest date we could sign a contract to sell the property and benefit from the CGT discount?

Thank you in advance.

Financial

Comments

  • Baysew on 17/04/2020 - 14:27
    +3

    Acquisition of asset for CGT is on Auction Day 11th May.

    Timing of a real estate CGT event

    when you enter into the contract (generally the date on the contract), not when you settle – the fact that a contract is subject to a condition, such as finance approval, generally doesn't affect this date

    • jmal4580 on 17/04/2020 - 14:39
      -1

      Doh! Missed that on the ATO website. Thank you so much.

  • arkie0 on 17/04/2020 - 14:35

    https://www.ato.gov.au/general/capital-gains-tax/acquiring-a…

    when you buy an asset under contract and don’t take immediate possession, such as with real estate – in this case your acquisition date is the time you enter into the contract (normally the date on the contract) and not the date of settlement (except for certain transfers to trusts)

    • jmal4580 on 17/04/2020 - 14:39
      -1

      Doh! Missed that on the ATO website. Thank you so much.

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