Hey guys, Been searching the net for a few days about this but have not had much luck probably because its not possible. I do plan on seeing an accountant soon but thought I would test the waters here. If I sell an Investment property and buy another property immediately (within 3months) to live in (1st ever ppor) will I pay less Tax on Investment Property Profit? I have never lived in Investment property for your information but have owned it for nearly 4 years.
probably not. But do you know how much tax you will be paying or just ‘assuming’ you pay 50% as some mistakenly think? capital gains gets a 50% discount if held for more than a year.
I don't think that is a thing in Australia. I believe that might be something that applies in the US.
Australia has NO "rollover" mechanisms that reduce CGT on a sale. Many people read about US tax rules on websites and ask this question. We do have a small busienss rollover system but that doesnt apply to property investments. The calculated profit is also affected by its reduced costcase for depreciation deductions and selling costs and more. The final profit is halved. The taxable element is added to the owners taxable incomes. Other issues can be imacted eg medicare levy, medicare levy surcharge, help debts etc. I suggest a competent adviser assist the calculation of the estimated gain. Then do this calc 1. Selling price 2. Less selling costs to be deducted from sale proceeds 3. Less estimated tax 4. Less bank loan = Equity it will release.
