Cap gains tax QLD

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From: David Simon


Hi,

Does anyone know about the regs re capital gains tax in Queensland.

We are planning to buy a an older style home in Queensland and live in it for a couple of months to a year before we rent it out.

While living in it we plan to renovate it.

I notice that there is a big difference between the amount home owners and investors pay for stamp duty.

What are the regulations: Can we buy as owner occupiers and then sell or rent at a later stage. Is there a set period that we must wait? Or is there some penalty or sliding scale that comes into place in this situation.

Thanks David
 
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Reply: 1
From: Duncan M


Hi David,

You seem to be intermixing the terms Stamp Duty and Capital Gains Tax..

Capital Tax Gain is levied a Federal Level by the ATO.

Stamp Duty is levied by your office of State Revenue, information on which can be found here:

http://www.osr.qld.gov.au/tax_duties_transfer.htm


Hope this helps.

Regards,


Duncan.
 
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Reply: 1.1
From: Les .



G'day David,

From what I've heard (read, "check it out"!!) the lower Stamp Duty for PPOR has a 6 month period. So, if you are renovating (and living in it) for greater than 6 months, there should be no problem with the Stamp Duty side of things.

As PPOR, there will be no CGT to pay if you resell. Even if you decide to renovate then rent it, the PPOR status can remain for up to 6 years, so long as you move back in within 6 years. Of course, you CAN'T have another PPOR over that period.

Regards,

Les


- "Eschew Obfuscation" - ;^)
 
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Reply: 1.1.1
From: Denise Macadam


Hello Les,
I am going to ask a silly question - hope you don't mind!
When do i pay my CGTax? I am selling an IP in Oct this year will probably settle in 30 to 60 days, will have had it twelve months.
Is my government "donation" taken out at some stage at settlement - or do i settle up with them at tax time the following year?

Thank You
Denise
 
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Reply: 1.1.1.1
From: Les .



G'day Denise,

You asked "When do I pay my CGTax? I am selling an IP in Oct this year will probably settle in 30 to 60 days, will have had it twelve months. Is my government "donation" taken out at some stage at settlement - or do I settle up with them at tax time the following year?"

This is probably a question for our resident Accountant guru, Dale. But, as far as I am aware, this Capital Gain is added to, or subtracted from, your personal Income at the end of the relevant fiscal year, and you are then taxed accordingly.

Also, you mentioned "will have had it twelve months" - make that 12 months plus one day if you can, just to be sure !!! Just to prevent paying "full rate" instead of "half rate".

As always, involve your Accountant in this (e.g. was this always an IP? Or did it spend some time as your PPOR? It makes a big difference...) Involve your Accountant SOON, so that any potential wrinkles can be ironed out ahead of time.

Regards,


Les


- "Eschew Obfuscation" - ;^)
 
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Reply: 1.1.1.1.1
From: Dale Gatherum-Goss


Hi

The Capital gain is added to your other income for the year when you complete your 2003 tax return. So, the tax will be payable about April in the year after you sell - that is 2004.

I would normally suggest, as Les mentioned, that you should ask your accountant to project your tax bill in advance. Then, put that projected tax in an interest bearing bank account like ING, or, in a mortgage offset account if you still have one.

This way, the tax money is available when you need it, but, the money is still working for you in the meantime.

I hope that this helps

Dale
 
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