How much capital gains tax need to pay

Discussion in 'Accounting & Tax' started by Jorgem, 15th Jul, 2017.

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  1. Jorgem

    Jorgem Member

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    I would like to know how to estimate the amount of capital gains tax to pay on investment property if decide to sell.

    I paid 355000 for property located in Perth , two years ago.

    Let's say I sell for 380000.

    Thanks
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    probably no more than 25% of the 'profit'.
     
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  3. Ross Forrester

    Ross Forrester Well-Known Member

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    You will probably have $12,500 of taxable income. You will then incur tax at your marginal rates on that income.

    It depends on why you bought it. If it is trading stock then the profit will be $25,000.
     
    Last edited: 16th Jul, 2017
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  4. Magoo

    Magoo Well-Known Member

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    Don't forget to make a maximum super contribution to minimise your tax in a high taxable year ;)
     
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  5. jrc

    jrc Well-Known Member

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    Did the 355000 include your purchase costs eg stamp duty, legals. these form part of your cost base
    Were you eligible to claim building write off which will reduce the cost base
    Have you claimed depreciation eg stove, carpets, blinds etc
    Is the 380000 before or after selling costs
     
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  6. Marg4000

    Marg4000 Well-Known Member

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    As a very rough guide, the most you will pay in cgt for an asset held for more than 12 months is 25% if you are in the top tax bracket.

    You include all costs both buying and selling - stamp duty, commission etc. Unless you have taken these into account, on the figures you gave, your actual gain will be minimal.
    Marg
     
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  7. Gockie

    Gockie Life is good ☺️ Premium Member

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    Agree with Marg - theres a good chance the buying and selling costs will probably eat up any profit. Still, its better than taking a loss.
     
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  8. Mike A

    Mike A Well-Known Member

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    lots of missing variables

    1. was the property ever your main residence ?
    2. what was the intention on acquisition ?
    3. what is the allocation of plant and equipment at purchase and sale ?
    4. did you do any renovations ?
    5. what capital works deductions have you claimed ?
    6. joint names ? tenants in common ? trust ?
    7. buyers agents fees ? stamp duty ?
    8. other income
    9. any third element costs ?
    10. tax resident or non resident ?
     
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  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    and does the word "I" actually mean you yourself? I often hear people say "I' and "My property" when it is not theirs but a spouses, or theirs and a spouse, or a company or a trust etc.
     
  10. Jorgem

    Jorgem Member

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    No this is my loan amount.
    No building write off.
    Yes have claimed depreciation cost.
    Before selling cost.
     
  11. Jorgem

    Jorgem Member

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    1.No
    2.negative geared to reduced my taxable income.
    3. No
    4.No
    5.Building , carpets , lights
    6. Joint names
    7.the 355000 is my loan amount , stamp duty and agent fees was took place previously.
    8.No
    9.No
     
  12. Jorgem

    Jorgem Member

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    My wife and myself are the property owners.
     
  13. Jorgem

    Jorgem Member

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    Thanks for everyone that responded , feedback is very valuable.
     
  14. Jorgem

    Jorgem Member

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    Tax resident
     
  15. Gockie

    Gockie Life is good ☺️ Premium Member

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    Stamp duty, agents fees, and everything else needs to be included in your cost base. I think you might not have much of a profit to consider. Note. I'm not an accountant.
     
  16. Jorgem

    Jorgem Member

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    Yes I think you might be right , will need to sell at higher price to make some profit . Hopefully
    the Perth property market gets better in the next few years.
     
  17. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Loan amount is irrelevant.
     
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  18. Archaon

    Archaon Well-Known Member

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    Terry is right, your actually purchase cost of the Land, total cost of the build, depreciation, selling costs, stamp duties and such are how you come to a cost base.

    Your best bet will be talking to a skilled accountant focusing on investment properties to help you come to the final figure.

    If your loan amount is 355k, I'm guessing the costs associated with getting the property were 390k or higher? This to me suggests that there is no profit to be made, and after selling costs you should pocket the difference between the sale and the loan amount.
     
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  19. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    The loan amount can be relevant. Not to CGT but to decisions about selling. The net sales proceeds less loan payout will reflect equity. Then deduct the CGT estimate and its what you are left with after all costs incl tax.
     
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  20. juxt1n

    juxt1n Well-Known Member

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