Hi guys, I am looking to sell an IP that I purchased in September 05.
To be eligible for the discounted CGT rate I must own the property for greater that 12 months.
If I sold the property on a lease option with a duration of 2 years and was exercised after 2 years would I then be eligible for the discounted CGT rate ?
Thanks
yes! as long as they dont exercise it in the first 12 months.
We buy properties in Adelaide. No Agent Fees.
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phone 0412 437 582It has nothing to do with the dates of settlement more importantly the date of the purchase contract.
You would assessed under the emerging profits ruling.
Richard Taylor
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Ph: 07 3720 1888
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I am not an accountant, but would think that the option is separate to the sale. The ATO assess the CGT on dates of the contract of sale. So initially you would only be entering into an option agreement. The contract of sale would come later, if or when they decide to cash you out.
But I beleive the option fee is taxable as a capital gain.
Terryw
Discover Home Loans
Parramatta
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Terry is correct!
the fact that you have an option on something has nothing to do with CGT or any other tax. It’s when the purchase takes place that makes a difference.Im not an accountant either, just my thoughts
We buy properties in Adelaide. No Agent Fees.
[email protected]
phone 0412 437 582We also bought a house in Sept 05, renovated and sold in Dec 05 with a Gain of $60000. Yes it is all taxable but we’ll offset that with super contributions, and the tax isn’t due until April 2007. We sold because the most gain from the property was after the reno, we didn’t want tenants wrecking our hard work, the interest on holding the property for 12 months would soon eat into our profit and that assumes that interest rates don’t increase causing values to drop. We needed the cash to build a sewer line on a land we’re subdividing so we took the cash when we could.
Not sure about the option thing it would be best to ring an Accountant I’ve been “retired” for too long.Amanda
“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”
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