Would like some feedback.
My wife and I bought a block of land in Dunsborough Lakes Estate back in 2003 for $126K. We have now had an offer of $275K. In April 2006 I transferred the title to my wife, effectively “selling” my half of the property for $120K (issues with ex-wife, Child Maintenance and the unfair system). Now we are up for CGT of probably around $10K. If we hold out till next April (1 year), we will be entitled to the 50% discount on CGT. So the question is….
Do we sell and pay the tax, put the money on our mortgage on our unit in Sydney, or wait till April next year and put it on the market then?
Any suggestions would be appreciated.
CheersSimon
Do you have a loan on the land? If so, holding the land till next April will result in you having to pay 5 months of interest – have you factored this into your Calcs?
And do you think you will be able to sell for more in April?
I suppose you also have to factor in the interest saved by plonking the money off the loan on your unit in Sydney.
Terryw
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Parramatta
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Hi Terry
There is no mortgage on the land. We have paid it off in full. We only owe $45K to my wife’s mother and $10K in agent’s commission. The rest we can dump on the mortgage of the Sydney unit, until we need to pay the tax. I believe though that can be deferred using our accountant. It is not a sure thing that we can sell the land for more next year, as new blocks are being released in the estate. It also seems the market has run a bit out of steam down there.
CheersSimon
Other than interest you may also have Rates and maintaince to factor in.
Not alot but may tip the scales 1 way or other.
Cheers
Richard Taylor
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Yes Richard, true. Not a lot, but I guess I am steering towards trying to reduce our mortgage in Syd. Guess it’s unpalatable to give $10K to the tax office, but then again the saving might be in the long term of the interest we save on our mortgage….
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