Capital gains

Hi

I purchased a property in WA for 570,000 in May 2018. If I sell now for 650,000 am I liable for CGT on the profit 80,000 or can I claim the initial borrowing and purchase expenses such as the stamp duty and other legal fees I had to incur when purchasing the property. If that is the case then the property including stamp duty and all other fees totals to 600,000. So does this mean I am only liable on CGT of 50,000 instead and if so what is the percentage I am liable for.

 

See the tax section

Work out the cost base then apply the 50% discount. There may be little tax to pay

 

Hi thanks. Just one thing when you say cost base so is the CGT on the profit based on just the purchase price or purchase price plus all the other expenses eg stamp duty and other legal and borrowing fees?

 

Depends on how much tax you want to pay.

 

PPOR or IP?
Can't claim interest on PPOR afik.. check with a tax specialist.
Also depends on what the valuer puts on the report for OSR.. at least for NSW, I'd imagine a similar scenario with WA.

 

It’s a investment property. Even if it was NSW though why would it matter what the valuers puts in a report? Doesn’t it go by the selling price minus (actual purchase price + cost base expenses)?

 

Tax would be based on around $25k income on what you have said above. The max tax would be $12k, but possibly much lower than this.

 

I selective read your post disregarding the 'sell now' part. The CGT purpose reports I get are almost always retrospective reports.

Yes sale price less related expenses from previous purchase price is tax liable.

 

What about depreciation implications? I’m not 100% sure but I think the last changes were made on 9th May 2018????

So you may have qualified for P&E deductions as well as capital works which I believe need to be factored into any CGT calc. You will need an accountant anyway so best to check with them.

CGT always a nice problem to have though

 

I assume its been used to produce income in this time. So it has 0 days exempt as your home or former home at any time. And that you dont have a spouse / partner with their own former home etc.

Costbase is likely to include actual cost + duty + legals + P&B + BA fee and non-deductible improvements etc. Add on selling costs eg selling agent, legals, etc. Then the costbase is also reduced for any depreciation and cap allowances deductions claimed. Profit is then split between each owner. And assuming its owned 12mths + halve that.

Watch out for things like private health insurance, HELP debts and Centrelink benefits incl child care etc. Yes a one off CGT event impacts these.

 

hi what’s P&B and BA fees?

 

I had an accountant once who used to ask me how much tax I wanted to pay at the end of every year.

 

How is your accountant
Philip Egglishaw getting on

 

He didnt ask how much tax you want to pay. He sold the dream of not paying any tax.

 

Hi there,
I purchased a house back in 2001, lived in till 2014, I rent out march 2015 up till now, If I sell it do I have to paid capital gain?

 

What was it doing between 14 and 15?

Where have you been living since 2015?

did you get a valuation for the house in 2015?

 

Yes I do received valuation for the house which was 250000 above the original price
I was rent a unit in other suburb

 

possibly not, but it will depend.

it also may be preferrable to pay capital gains on this house so another could be tax free.

Seek proper advice.