All Topics / Help Needed! / A Bit Confused

Viewing 2 posts - 1 through 2 (of 2 total)
  • Profile photo of mwoodingmwooding
    Member
    @mwooding
    Join Date: 2004
    Post Count: 15

    Hi All,  This is a pretty simple question.  I could ask my accountant tomorrow but I really want to know now what the answer is. Is a renovation considered in capital gains when you sell a property?  Lets say I buy a place for 1Mil (inc stamp duty etc) and spend 200K on a renovation, if I sell for 1.3Mil is the profit 100K and what I pay tax on?  or is it simply the difference between the buying price and the sale price?

    Thanks in advance.

    Profile photo of illuminatiilluminati
    Member
    @illuminati
    Join Date: 2006
    Post Count: 81

    it is generally as you first said. the renovations increase the cost base of the property. effectively just making it as if you paid more for it.

    BUT there are catches… if you are deemed to be in the business of renovating properties then it counts as income and stock etc. here is a page from the ato which gives some examples so you can tell what situation you are in.

    If you still cant tell after reading that, best to talk to your accountant.

    http://www.ato.gov.au/print.asp?doc=/content/57402.htm

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.