Are you looking at buying investment property in Australia and wanting to know the capital gains tax implications ?
Well, as it is an investment property, any gain that arises from its sale or disposal will be subject to capital gains tax. The gain will be added to any other Australian income and it will be taxed at a rate dependent on which tax bracket you are now in. And that can be anything from 17% to 48.5%. If you’re a non-resident for tax purposes, then this rate is a flat 29%.
If you sell this property within 12 months of buying it, then 100% of the gain will be taxable. However, if you sell it after 12 months of buying it,
then only 50% of the gain will be taxable.
EXAMPLE
Investment property purchased on 19 May 2004 for $200,000. It is then sold on 14 January 2005 for $235,000. The capital gain is $35,000. It is 100% taxable because the property was only held for 7 complete months.
Assume the property was sold on 23 August 2005.
The capital gain is $35,000. Only $17,500 is taxable because it was held for more than 12 months.
About The Author
Warren Kruger is an Australian Tax Specialist and Advisor. For a FREE Report "7 Essential Strategies to Reduce Your Taxation NOW!" Sign Up RIGHT NOW in the above right Opt In Box
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Warren Kruger is an Australian Tax Specialist and Advisor. For a FREE Report “7 Essential Strategies to Reduce Your Taxation NOW!”,enter your name and email address in the Opt In Box located on the top right hand side of this article.
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