what is the best tax strategy for IP?

Discussion in 'Accounting & Tax' started by Chi Thai, 2nd Sep, 2018.

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  1. Chi Thai

    Chi Thai New Member

    Joined:
    2nd Sep, 2018
    Posts:
    3
    Location:
    melbourne
    Hi everyone,

    I bought a house in 2008 at around 370,000 with a home loan 245,000. In 2013, I refinanced the house and withdraw 135,000 equity for investment in my business. Since then I have 2 loans: a home loan 245K and an investment loan 135K. The property generates a rental income 1,800/pcm. My business did not go well, I still own 380K in total. Now the property estimated value is 600K-750K, I think of selling that property at the price 650-700K.

    Could you please give me an advise on my case whether I have to pay very high capital gain tax if I sell it? how should I reduce the tax? what is the best tax strategy for my IP?

    Also I would like to look for an accountant who is expertise in real estate investment and good at property tax to help me with my future property investing. Please recommend me someone in Melbourne that I can count on.

    thank you
    Best Regards
     
  2. Terry_w

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

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    The loan balance is irrelevant for CGT purposes. But if you sell the business loan would generally need to be paid out which will effect deductions going forward - unless you can substitute security.

    See www.propertytaxsolutions.com.au in melb.
     
  3. Chi Thai

    Chi Thai New Member

    Joined:
    2nd Sep, 2018
    Posts:
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    Location:
    melbourne
    Thanks. can you tell me more about substitute security?
     
  4. Terry_w

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

    Joined:
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    Posts:
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    Location:
    Australia wide
    You just change what the loan is secured by - a mortgage over another property for example, without changing the loan itself.
     

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