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Acounting treatment for timing of property sale

Discussion in 'Accounting & Tax' started by rjw180, 1st May, 2016.

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  1. rjw180

    rjw180 Member

    Joined:
    1st Jul, 2015
    Posts:
    15
    Location:
    Melbourne
    Hi all,

    so I've just sold an IP and settlement was set for 29th June. It just occurred to me that it may be beneficial to delay this until 1st July - the reason being is that I can delay payment of CGT until the tax assessment for FY16/17 year rather than the current one.

    Is that accurate?

    What is considered to be the sale date of an IP - is it the date the contract is signed or settlement date?

    Also, what's the story with land tax? I've yet to pay the current land tax assessment notice for the period 1 Jan 2016 to 31 Dec 2016 (and due on 1st July). I'm guessing I will still need to pay this regardless of whether I delay settlement or not. Is that correct?
     
    Last edited: 1st May, 2016
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  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
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    Sydney
    You mean tax treatment. It is the date of the contract that counts for income tax. For land tax it will depend on the state the land is in.
     
  3. rjw180

    rjw180 Member

    Joined:
    1st Jul, 2015
    Posts:
    15
    Location:
    Melbourne
    Yeah you're correct, I should have said tax treatment (that and my clumsy fingers spelt Accounting wrong anyway :p)

    Thanks Terry.

    Property is in VIC. The way I read the SRO website it suggests the assessment is done on a survey date of 31st Dec 2015 for the current assessment (and therefore I'm liable for the full amount):

    How is land tax calculated?

    Your assessment is calculated on the total taxable value of your land holdings (the site value usually found on your council rates notice) as at midnight on 31 December of the preceding year (for example, what you own as at midnight on 31 December 2015).