To Sell or Wait?

My knowledge in this area isn't very deep so this factor to consider may be shot down quickly.

If the property value is not required to fund your uncle & aunt's retirement, and they intend on their child inheriting it, could there be tax advantages to hold it and not incurring CGT? I suggest going through Terry's tips as I'm sure he has covered it or something similar.

 

@sash, Can we pay interest in advance for other IPs and reduce capital gain tax component in the present year? Does ATO allow this?

 

I am not sure I properly understand the case for selling.

The property was purchased 20 years ago and gives the owners $9k per annum after tax, by just sitting there.

The market is down, but it does that twice per decade, so no need to jump at shadows there.

I hear you that the property has a low yield, but presumably that is based on current valuation, not on the price they paid.

My suggestion would be to consider (a) renovating the property to exploit more value or (b) hiring a better property manager to extract better cash flow.

The owners are in their 60's which is not that old either in the scheme of things. So it reads to me that the owners are interfering with something that doesn't need to be over-handled.

 

Yes you can...but balance that out...because you might have to advance pay again next year...as you will not have interest deductions the following year. Talk to you accountant..and double check...better say this before someone says I am not qualified to say this.....who would listen to a yahoo on the internet....