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Buying / Selling a Property
In general you acquire property when you become its owner. This usually happens at the time the contract is entered into.
The most common way of acquiring property is by buying it. Although there are other ways of acquiring it, such as, inheriting it, receiving it as a gift, or winning it as a prize. The money you pay to acquire a property, or in some cases its market value, together with other related expenses becomes its cost base.
A capital gains tax (CGT) event happens when you dispose of property.
The most common way of disposing of property is by selling it. Although there are other ways, such as giving it away, or by it being compulsorily acquired – for example, to provide land for a proposed freeway.
At the time a CGT event happens, you may make a capital gain or a capital loss.
If you were to make a capital gain, that would be subject to capital gains tax. However, if instead you make a capital loss, it may be offset against capital gains you make on other assets – thereby reducing the overall amount of tax you must pay.
Significance of Contract Dates
- Properties you acquired before 20 September 1985 are generally exempt from Capital Gains Tax.
- The length of time you hold a property can affect the way you calculate your capital gain.
- The date of disposal determines in which income tax return you show any capital gain or capital loss you make.
Our dedicated team can assist you with queries relating to how Capital Gains Tax can affect buying or selling a property. Complete and submit the express enquiry form or call us on +61 2 9223 9166 to arrange an appointment.
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The Quinn Group operates Quinn Consultants, Quinn Lawyers, Quinn Financial Planning and Quinn Financial Solutions. The Quinn Group provides related information in regard to legal, accounting and financial planning issues. Liability limited by a scheme approved under Professional Standards Legislation* *other than for the acts or omissions of financial services licensees.