avoiding CGT

Hi,
I have just bought my first place and have to rent it out for about 9 months before i move in. I own no other homes.

If I sell the place after 9 months I still need to pay Captial Gains Tax correct? Is there a way to avoid this?
 
Sorry mate, you will always have a period that was not CGT exempt as you haven't moved in as soon as practicable (having tenants doesn't cut it with the ATO.)
 
If I sell the place after 9 months I still need to pay Captial Gains Tax correct? Is there a way to avoid this?

1. You only pay CGT on an actual gain. If there is no gain (CG), then there is no tax to be paid.
2. If there is a CG, then you only pay CGT at your own marginal tax rate. If you can, then try to orgainise the sale of the property to go into a FY where you are making a smaller income.
3. Consider keeping the property for 12 months (not 9) as you will get a 50% discount on any CGT to be paid.
4. Consider selling in July. Any CGT would not then have to be paid until the EOFY + the time accounants get to submit your tax return. The tax would then not need to be paid for well over 12 months during which time you could use the money for other investing.
5. Best option to avoid CGT is to never sell. :)
 
for 12 months (not 9) as you will get a 50% discount on any CGT to be paid.
4. Consider selling in July. Any CGT would not then have to be paid until the EOFY + the time accounants get to submit your tax return. The tax would then not need to be paid for well over 12 months during which time you could use the money for other investing.
. :)


We used this strategy when we sold two IPs. We sold in July 2007 (contract date). As we use an accountant our 2007/08 return had to be lodged by the end of May 2009. We then were given around one month to pay the tax. We therefore had the use of this money (in an offset account saving interest) for nearly two years.
Marg
 
2. If there is a CG, then you only pay CGT at your own marginal tax rate. If you can, then try to orgainise the sale of the property to go into a FY where you are making a smaller income.

So does that mean that if you didn't have a job when you sold the property and were in the $0-$8k (whatever the taxfree threshold is?) bracket, then you pay no CGT?

doesn't sound right, but good if it were so
 
So does that mean that if you didn't have a job when you sold the property and were in the $0-$8k (whatever the taxfree threshold is?) bracket, then you pay no CGT?

doesn't sound right, but good if it were so

Depends how much the taxable gain is. It just gets added to your taxable income, so you pay tax at the relevant tax rates i.e. first $6,000 is tax free, then 15c up to $35K etc. So if your taxable gain, after discount was $30K, you'd pay 15c tax on $24K.
 
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