Capital gains tax

Capital gains tax (CGT) is the tax charged on capital gains that arise from the disposal of an asset including investment property, but not your place of residence acquired after September 19, 1985.

You are liable for CGT if your capital gains exceed your capital losses in an income year. (If you are smart, you will time asset disposals so that if you really must take a capital loss it will be at a time when it can offset a capital gain).

he capital gain on an investment property acquired on or after October 1, 1999, and held for at least a year, is taxed at only half the rate otherwise. This means a maximum rate of 24.25 per cent if you are in the highest tax bracket.

The capital gain is the profit you have made over and above the cost base the purchase price plus capital expenses such as subsequent renovations. Make sure you keep good records of these sorts of expenses.
Capital gains tax is a complex area, so you should get advice specific to your circumstances from a taxation accountant.

Talk to Mortgage Australia today about your next home loan.