Help please…I bought a property4/5 yrs ago refinanced 12 months ago now want to sell it to buy an other property..what is the position on capital gains tax…can I roll my profit over to the new property or do I have to pay CGTax up front if so how do I minimize my payments. I am looking at $200000 profit[
][^]I assume it is an ip. I don’t think you can roll over the profit to the new property.
I think there is one way to minimise CGT by sale it at time where you have a very low income.
Warm Regards
ChanDollars
[Keep going, you’re on your way to financial freedom]Do you have to sell? Can you simply use a line of credit against current IP to purchase next one. Serviceability an issue??
James
Exactly.. Why sell, by the way ‘not selling’ will really minimize your CGT [
]there are always other options, maybe post some details in the ‘help’ or ‘finance’ area of this forum..
“Money is a currency, like electricity and it requires momentum to make it Effective”
If u r close to retirement I believe under the new rules you can roll your CG into your superannuation fund.
Spider
Thank you for all the information I am 40 and not retiring yet and if I refinance the property would not command enough income for what I need.
ezy
you will have to pay CGT but remember 1/2 of the profit is tax free, so you will pay tax on $100,000 so at the highest tax rate of 47 cents in the dollar. so on 100,000 at 47 cents in the dollar you will be paying $47,000 on your 200,000 profit.
what does that do to your figures for your next project.
BTW if you own in a company you will pay CGtax on the full 200000k
regards westanI find +ve cashflow deals in New Zealand which I sell to other investors. To be on my database send an e-mail to [email protected]
thank you so much for that information ,,,The property is in my personal name so i feel a lot better now
I can handle $45000 loss dont like it but can live with it..again thank youI dont think it is that clear cut is it? dont you have any capital losses? is that a true profit? All those legals and things when you bought the place initially are considered at time of sale. (costs)
Ezy,
Guide to Capital Gains Tax – http://www.ato.gov.au/individuals/content.asp?doc=/content/31570.htm&page=1#H1_1
James
Originally posted by westan:ezy
you will have to pay CGT but remember 1/2 of the profit is tax free, so you will pay tax on $100,000 so at the highest tax rate of 47 cents in the dollar. so on 100,000 at 47 cents in the dollar you will be paying $47,000 on your 200,000 profit.
I just want to clarify the comment above on $47,000. I pretty sure you know about this, but in case you don’t as below:
Tax rate….
$0-$6,000 = Nil
$6,001-$21,600 – 17%
$21,601-$52,000 – 30%
$52,001-$62,500 – 42%
over 62,501 – 47%plus 1.5% medicare levy.
Therefore, it would be lesser than $47,000 of tax.
Warm Regards
ChanDollars
[Keep going, you’re on your way to financial freedom]Chan I think Westan was saying if you are on a salary of $100k, a capital gain, in this instance, would effectively make your assessable income $200k. The additional $100k, would be obvioulsy taxed at the marginal rate of 47%. Therefore the $47k figure.
James
Originally posted by georgisj:Chan I think Westan was saying if you are on a salary of $100k, a capital gain, in this instance, would effectively make your assessable income $200k. The additional $100k, would be obvioulsy taxed at the marginal rate of 47%. Therefore the $47k figure.
James
Thank James, I missed that bit. So it’s all good here. Sorry Westan.
Warm Regards
ChanDollars
[Keep going, you’re on your way to financial freedom]Yes Thank you all, what a great enthusiastic bunch you all are .I am pleased with the response
yes the true profit will be $200000 taking into account all costs I can see that if I refinanced and put that money into my other project that the rents would even out but I really want to sell , its just finding the least painful way.
Thank you all.hi ezy and others
your situation highlights the advantage of owning in a family trust. Large profits can be distributed to family members and paid at there tax rates, the effect can be a saving of thousands perhaps tens of thousands depending on the situation.
regards westan
I find +ve cashflow deals in New Zealand which I sell to other investors. To be on my database send an e-mail to [email protected]
Hello
You mention that you are willing to pay $47000 in CGT, this is a free present to the Goverment were everyone else is trying not to pay any more tax’s then necessary.
Take a second look first, think about you re draw ability , and if you can rent the property as this will give you income as well.
Good luck.I agree with Garry. Admittedly, there is no interest repayment if you sell, but you will get rent which hopefully should cover some or all of that.
If you sell, you pocket $200K less $47K less any other costs.
If you refinance, surely you could pull out at least $160K? Although I guess it depends on whether or not that $200K is the 20% equity you cannot get at.
When you talk about the payments, wouldn’t a ‘saving’ of $47K which you will NOT pay to the govt in Tax be able to make you feel better about paying more interest and keeping both?
I just really think OUCH! when it comes to paying that much CGT if it can be avoided in any way. If you really want to sell, then good luck, and you have made a good gain in a few years!
Cheers
MelCan someone please advise whether CGT is payable on land.
I bought a block of land in 1994 and sold it this month.
Thanks
santa, I think you’ll find that it is. Easy to confirm though – the ato website should cover it.
Cheers
MelSanta
Not a matter of could be my friend it is.
Few exceptions but if you purchased it in the last 17 years then YEP.
Cheers Richard
richard at fhog.com.au
http://www.fhog.com.auThere is no such thing as a problem.
Just a solution waiting to be foundRichard Taylor | Australia's leading private lender
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