Viewing 13 posts - 1 through 13 (of 13 total)
  • Profile photo of -o_o--o_o-
    Participant
    @o_o
    Join Date: 2003
    Post Count: 9

    Hi my inlaws just got an offer to sell there house they invested in little over a year ago they brought it for 125k and the offer was 210k thats a great profit but i am wondering what sort of fees will they be looking at if they sold, apart from the agents fee.

    Profile photo of redwingredwing
    Participant
    @redwing
    Join Date: 2003
    Post Count: 2,733

    YOU’D NEED TO POST WHAT STATE THEY’RE IN..

    PRESUME IT’S THIER PPOR TOO ??

    REDWING

    “Money is a currency, like electricity and it requires momentum to make it Effective”

    Profile photo of -o_o--o_o-
    Participant
    @o_o
    Join Date: 2003
    Post Count: 9

    Sorry the state is N.S.W

    Profile photo of HueyHuey
    Participant
    @huey
    Join Date: 2003
    Post Count: 213

    Hi (-o_o-)

    They won’t pocket all of 85K (210K – 125K). Apart from agent fee they have to pay solicitor fee, loan discharge fee … and capital gain tax on the half of the amount which will be calculated approx. as shown below:

    85K – agent fee – stamp duty when they bought – solicitor fees for buy & sell – other expenses + claimed depreciation

    Regards

    Huey

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    What State they are in doesn’t matter.

    If it is an investment property, then probably they will have to pay CGT. Also agents fees, legals etc

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of -o_o--o_o-
    Participant
    @o_o
    Join Date: 2003
    Post Count: 9

    The cg doesnt that percentage come down a bit after a year. Also what do u think the percentage will be.

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544

    Hi ‘Face’

    Capital gains liability is halved if the asset is held for more than a year.

    The net gain (selling price – selling costs) – (purchase price + costs – depreciation claimed) X 50%.

    This figure is then added to your tax return as income and treated in the same way other income sources and taxed accordingly.

    Derek

    [email protected]

    Profile photo of Still in SchoolStill in School
    Member
    @still-in-school
    Join Date: 2003
    Post Count: 1,844
    Originally posted by Derek:

    The net gain (selling price – selling costs) – (purchase price + costs – depreciation claimed) X 50%.

    think you got your figure a little wrong for the net gain…

    for the net gain (profit) = (selling price – selling costs) – (purchase price + costs + depreciation claimed) x 50% (if held for more than 1 year) then taxed accordingly to what the net taxable net profit is.

    This figure is then added to your tax return as income and treated in the same way other income sources and taxed accordingly.

    not sure, by what you mean hear, but, if you are talking about a -ve geared property im presuming.

    it would be (gross income + rental income) – (tax benefits(could be any paper losses and deductions) + interest incurred) x by the taxable threshold rate = actual net income.

    Cheers,
    sis

    People 4get that by saving just $3 a day & investing it sensibly
    over a working life, you’ll end up with around $1 million

    Profile photo of Still in SchoolStill in School
    Member
    @still-in-school
    Join Date: 2003
    Post Count: 1,844

    though, it would be nice if, we didnt have to add, back in our depreciation deductions to a capital gains being taxed… [:)]

    actually it would be very nice….

    Cheers,
    sis

    People 4get that by saving just $3 a day & investing it sensibly
    over a working life, you’ll end up with around $1 million

    Profile photo of landlordtobelandlordtobe
    Member
    @landlordtobe
    Join Date: 2003
    Post Count: 15

    sounds like they’d be better to hang onto the property and use the equity to purchase more IPs! (and buy the next IPs in NZ so they don’t have to worry about CGT!)

    Profile photo of woodsmanwoodsman
    Member
    @woodsman
    Join Date: 2004
    Post Count: 714

    There might be no CGT in NZ, but you would still be liable for it in your Aus tax return, wouldn’t you??

    James

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544

    Hi Sis,

    Assuming the following (numbers rounded for ease of explanation).

    Bought $100K
    Buying costs $5K
    Depreciation claimed over period of ownership $10K

    Sold $200K
    Selling Costs $5K

    Net Capital Gain = (200-5)-(100+5-10) = $100K gain

    Depreciation is a subtracted under the claw back process under section 40/43 of the tax act.

    As the property has been held for more than 12 months the net taxable gain is $50K. This $50K is added to other income sources earned during the financial year.

    Assume $40K is earned from other taxable sources then total declarable income is $90K.

    From the $90K all allowable deductions (work, investing etc assume $20K) are subtracted to give a taxable income of $70K – this figure determines what the CGT rate is – in this scenario this taxpayer would be liable for total tax of ~$20K.

    If on the otherhand the taxpayer had a gross income of $10K (and the same expenses) their total taxable income would be $10K + $50K – $20K = $40K. Tax payable on this would be ~$8K.

    That is why any property sales should be done in low (or no) income years as the capital gain tax collected is much less than it otherwise would be in a high income year.

    But hey I am not an accountant – and I stand to be corrected.

    Derek

    [email protected]

    Profile photo of redwingredwing
    Participant
    @redwing
    Join Date: 2003
    Post Count: 2,733

    TerryW

    Thought agents fees were different in each state ??

    I.E – NSW Deregulated ???

    that’s why i asked which State ??

    Although i’m in WA and just going on what i believed, am i wrong ??

    I generally would think around 3-5% of actual selling price, would be overall costs ( generalisation only )

    Fees incurred would include

    Agents Fees
    Solicitors Fees
    Settlement ( rates adjustments etc )
    Bank Fees
    Government Taxes

    REDWING

    “Money is a currency, like electricity and it requires momentum to make it Effective”

Viewing 13 posts - 1 through 13 (of 13 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.