Hi there.
my wife and i purchased a property 2 yrs ago in Frankston for $205,000 which we rent for 235 p/w and just found out that if we wanted we could get around 245,000 for it.
We dont want to sell but are curious as to what type of tax we would have to pay if we sold. Does Gst come into it, etc?
Any ideas?
If joint owned your gain will be divided into 50% wife and 50% hubby
$40,000 becomes $20,000 for hubby and $20,000 for wife
if owned > 12 months 50% discount applies to capital gain
$10,000 to hubby $10,000 to wife
Worse case scenario 50% tax rate Capital Gains Tax of $5000 for hubby and $5000 for wife
Need to look at marginal tax rates of wife and hubby to work out likely tax as capital gain is added to your incomes and then taxed.
I am assuming you claimed deductions on costs of holding the property like interest, rates,ect against rental income.
GST is for new buildings or substantial renovations on 2nd hand houses rather than for 2nd hand houses being resold.
You need to also factor in State Stamp duty for your purchase of the next investment property and sales commissions paid to real estate agents for selling the house.Ducksters post is only relative if you purchased the property as Joint tenants or as Tenants in Common using a 50 / 50% shareholding.
Any other combination of share would aportion the capital gain accordingly.
Richard Taylor | Australia's leading private lender
We have an example calculation on our website at http://www.propertydivas.com.au/3TaxMang/CapitalGains.aspx
Thanks to all for your replies. Much appreciated.
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