about 5 years ago we bought an IP and recently refinanced to access about 30k in equity. I was just wondering if we should have paid CGT on this amount? Without the 5 years of CG there would have only been about 3k equity in the property (we paid only 5% deposit at purchase) so, clearly, the money that we accessed (to pay off other personal debt) was a direct result of this growth. Or do we simply worry about it if and when we sell?
Cheers
SonjaPS I am aware that we can’t claim the interest on this part of the loan as a tax deduction.
Hi Sonja,
No CGT is only calculated when the asset is sold – and as you still own it there is nothing to worry about from a CGT perspective other than retaining all paperwork related to the proeprty for at least five years after it is disposed of.
And we have already talked about the need for separate accounts for taxation purposes when investment and personal expenditure is involved. [exhappy]
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
hi sonja
as my long on suggests what you hve simply done is access some of your capital growth.the amount you have borrowed is not tax deductible but no cgt is payable..this is the beauty of an investment property you can borrow against the capital growth and not pay tax (let your kids do that )lol.whats the point of having all this built up equity if you cant enjoy it.so i say go for it hang on to your property and re finance downthe track and enjoy the fruits of your labour. good lucknever never never sell
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