Hello,
I am wondering about selling an i.p.
My qu is this: if cgt applies on 50% after 12mnths,is that of it earning rent? Or of ownership of the property??[confused2]
I ask b/c, i am wondering if i owned the land for 3 to 4 yrs,then built,now rented, if i sold within less than 12mnths of building,how much cgt would apply??? Help![blink]misty – cgt applies on 50 pct upto 12 mos after date of purchase of the block, not the building of the house.
Hi Misty1,
The ATO website has a downloadable e-CGT calculator. You can plug in justabout any scenario and it will calculate CGT payable.
Just a thought![worried]thnx re; website.very helpful.
Misty
I think you are a bit confused. CGT is applied to the gain in the value of property. If less than 12 motnhs the gain is just added to your income (less some deductions), if over 12 months, you can get a discount and only 50% of the gain is added to your taxable income. So how much tax you will pay will also depend on your income for the year.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Misty
You might find the ATO would consider this as 2 separate assets – the land as one and the new building as another. Also if you’re developing to sell they might look at that as ordinary income and not capital gain
crj
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