Achieving Capital Gains Tax Property EXEMPTION in Australia
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- เผยแพร่เมื่อ 5 ก.ย. 2024
- Are you looking to sell your property?
If you are, then you will also need to know about the tax implications of doing so.
In this video, I explain the main residence exemption that applies when selling your property, as well as run through 4 situations that can change the tax exemption status of the sale of your home.
Link to Full Article: bit.ly/33g6AHS
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Davie has over 10 years of experience in advising businesses in management accounting and taxation issues. He heads up a passionate team at Box Advisory Group who are dedicated to offering proactive and outstanding service to our clients.
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He is a member of the Chartered Accountants Australian and New Zealand, a member of the Australian Tax Practitioners Board and holds a Bachelor of Commerce degree from the University of New South Wales.
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DISCLAIMER: Please note that every effort has been made to ensure that the information provided in this video is accurate. You should note, however, that the information is intended as a guide only, providing an overview of general information available to contractors and small businesses. This guide is not intended to be an exhaustive source of information and should not be seen to constitute legal or tax advice. You should, where necessary, seek your own advice for any legal or tax issues raised in your business affairs.
I've watch 10 video's about avoiding GCT now and not 1 has mentioned the 6 month rule when transitioning between PPOR's. If you changed your PPOR between homes and sell the original home within 6 months, you pay zero CGT. This is provided that you have made no rental or business income on the outgoing home.
Yes thats correct! I suspect that its not a question that gets asked that often. hence why it isnt explained often
Hi Davie,
For example, If you give one room for rent in your primary residence that is 20% of your property and you sell the property after 12 months so you get 50% deduction in the CGT. So when you pay CGT you pay on 20% after 50% or on total of profit made like on 100%. Like we are still able to get 50% discount on CGT when we rent out one room.
Yes correct also in your example you can also apportion how long you rented it as opposed to it being a full main residence. Most ppl don’t rent it for the whole period they own it.
hi , in dicember 2009 bought a unit and live there 5 years after rent it in January 2015 for 7 year , when move from my unit i pay rent a property in from January 2015 until dicember 2020 and in Diciember 2020 i move from my own house that i bought 2013 (was rent it out from 2013 to 2020) , My
1.- question is do i have to pay CGT on my unit that i bought in 2009 that i live 5 year and rent out for 7 years ? if is yes how much or what is the formula to calculate the amount need to pay ?
2.- my house i bought 2013 and rent it until 2020 and move in diciember 2020 until today october 2023 how much capital gain tax should i pay
thanks
Dear Davie, can you please help me calculate for my house. I wanted to clarify about 6 year rule !
Hi I am provided with a rental by my employer and own two investment properties.
I have never lived in either and wish to sell one.
Can I claim a CGT exemption for it?
Hi, you example 4 where if choosing to elect other property as main residence, your calculation on capital gain is apportioning the gain based on earning period. Wouldn’t s.118.192 97a apply? Where you use market value at first used to produce income date? If purchased after 20.08.96.
Yes correct, so I believe the editing in this video removed that part I mention. I will have to do a new video to clear this up.
If you rent the old property then you will need to get a market valuation on that property and the market value becomes the cost base.
But if you decided to keep the old property and it doesnt earn income then you do the proportion method.
Thank you for your explanations. I have another question. I have lived in my PPOR for 6 years and decide to move to another property when I buy it. but later I decide to sell my previous property before retirement. Do I still pay CGT on first property?
Please explain how do I know if I’m exempt capital gain ? I bought a house back in 1998 for $110K n now sell for $287K. How I know what is my capital gain??
Best to speak to an accountant and get them to prepare it for you. Definitely something you should speak professional advice and pay for the service.
Hi Davie, I would like to sell my house in Australia, but have been in USA since July 2021 on a tourist visa and haven't made any income from work. Would I still be considered an australian tax resident and be exempt from CGT. When do i lose this CGT exemption once i am overseas, is it when I start working here or when i get my Permanent residency? I am an Australian citizen and have been there my whole life. Have recently been just holidaying in USA
Hey its hard to say without an accounting getting a full understanding of your situation. I would advise you to speak to an accountant and pay for a consultation.
Does the 6 year rule work if you move overseas to live with parents but come back to your home within 6 years
Hmm best to speak to a tax expert with this one as you may not be considered an Australian resident anymore
That’s where you lose main residence exemption
@Davie Mach but your a tax resident for 5 years when you leave Australia. Its complicated. Some accountants dont even know 🤭
@@whynot2030 sorry I mean best to speak to an international tax expert. Residency rules are quite complex and I don’t have experience to advise on that.
I’ve never heard of a 5 year tax residency rule when leave Australia
@Davie Mach when your a citizen a tax payer in Australia and work overseas you must declare the income overseas you make. Even if you already paid the tax in another country
@@whynot2030 yes I’m aware of that. But first you need to confirm if you are an tax resident in Australia as I mention before. Even if you are an Australian citizen you could be seen as a foreign resident for tax purposes.
I have bought a home in 2013, and have been renting it out. Having never lived in it, i am wondering if i live in it for half a year now. Can i sell and avoid the CGT?
No, unfortunately you cannot
It will be proportion on the time it was your investment vs home.
if you bought a property and it was originally an investment and you don't own any other properties. Then you move into this property and live in it
for a number of years, is it tax exempt or only a portion?
Portion, unfortunately as it was an investment property first.
Hi Davie
Good explanations, I have a question
If you decide to sale your first home within 6 years and you hold another house that time you can claim exemption for first home?
Can you also claim exemption for the second home as well?
Thanks
Hello you can only have one main residence at one point of time unless you are moving houses. So you have to make the choice on which one