All Topics / General Property / Tax on claimed depreciation???

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  • Profile photo of maximusmaximus
    Join Date: 2003
    Post Count: 189

    Hi all. Just wondering, when you sell an I.P that you have claimed depreciation on, over the years, do you have to pay tax on the claimed depreciation or only have to worry about CGT.


    Profile photo of depreciatordepreciator
    Join Date: 2003
    Post Count: 541

    Hi Marty,
    You only pay tax on any depreciation claimed on the building, not on the Depreciable Assets/Fixtures and Fittings. In many cases, depreciation claimed on the building is less than that claimed on the Assets.

    Profile photo of Misty1Misty1
    Join Date: 2004
    Post Count: 348

    Can u pls give an eg scott? As i have just started claiming depreciation,but not sure of how it will affect me if i need/want to sell.

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

    Hi Marty and Misty,

    Not an accountant so disclaimers apply.

    Assume $100K property and with $20K building claims and selling for $200K and $5K capital costs incurred in buying the property.

    Effective purchase price is $100K + $5K – $20K = $85K (and not $100K as many think)

    CG is therefore $200K – $85K = $115K (I have ignored selling costs).

    CG is $57.5K (half of $115 – held for more than 12 months) which is added to your other income and taxed accordingly.

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Viewing 4 posts - 1 through 4 (of 4 total)

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