Selling an investment property

Discussion in 'The Buying & Selling Process' started by Martinez22, 15th Nov, 2016.

Join Australia's most dynamic and respected property investment community
  1. Martinez22

    Martinez22 Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    374
    Location:
    Perth
    When you sell an investment property, when is the CGT payable? Do i have to retain settlement funds till tax time to pay ATO what I owe? Curious to know how the process works as I have never sold an investment before
     
  2. Ross Forrester

    Ross Forrester Well-Known Member

    Joined:
    30th Oct, 2016
    Posts:
    2,085
    Location:
    Perth, Western Australia
    The tax on the sale of the property is calculated when you prepare a tax return. So if you sell now the tax return for the year ended 30 June 2017 will include the capital gain on sale.

    The return will then be due for lodgement with the Tax Office sometime from Jan 2018 to May 2018 if you use a tax agent. The tax payable on sale will then be assessed to you shortly afterward requesting payment.

    Their is no provision for tax on settlement unless you are a non resident (and then only for higher value properties). So you will need to set the tax bill aside.

    Before you sell find out what the tax bill might issue as and see if their are opportunities to reduce or eliminate the tax burden. It could affect your decision on what you are doing.
     
  3. Martinez22

    Martinez22 Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    374
    Location:
    Perth
    Thanks for clarifying :) so basically, dnt spend it all.. leave some aside for the tax payable?
     
  4. Ross Forrester

    Ross Forrester Well-Known Member

    Joined:
    30th Oct, 2016
    Posts:
    2,085
    Location:
    Perth, Western Australia
    Yes - but "don't spend it all" could be a good life motto in any event.
     
    legallyblonde and Martinez22 like this.

PFI can assist you with your investment strategies for your SMSF, Life Cover for your members and assistance with compliance. We provide the research to ensure your investment selections achieve the goals. This is the value of advice