Say for example you buy a block of land. Pay $100,000 for it - worth $150,000 when you settle. You sell straight after settlement. You pay 30% tax on PAYE. How do you calculate net profit with capital gains tax? 
How To Calculate Net Profit With Capital Gains Tax On Sale Of Property?
- Thread starter Body-By-Jake
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Say for example you buy a block of land. Pay $100,000 for it - worth $150,000 when you settle. You sell straight after settlement. You pay 30% tax on PAYE. How do you calculate net profit with capital gains tax?
I am presuming that you are selling at the higher price? My understanding is that you take the selling price, subtract the cost price & all other expenses (ie legals, R/E etc) & then add your profit onto your taxable income. This then becomes the new taxable income, so your tax will be dependant on this.
So using this method through the ATO:
Purchase Price: $100,000.00 (assuming no deposit is paid)
Sale Price: $150,000
Stamp Duty: $2,972.60
Solicitor's Fee (Purchase): $800.00
Solicitor's Fee (Sale): $500.00
Agent's Commission (incl. GST): $4,620.00
Total Cost Base: $108,892.60
Therefore, Purchase Price: $150,000 less Total Cost Base: $108,892.60 = Capital Gain: $41,107.40
Add Capital Gain: $41,107.40 to Gross Income: $70,000 = New Taxable Income: $111,107.40; hence: total tax payable = $33,209.57
Tax on original gross income of $70,000 = $16,650.
So in conclusion I would assume that capital gains tax on the above scenario would be the difference between $33,209.57 & $16,650 = $16,559.57
Therefore $108,892.60 + $16,559.57 = $125,452.17
So $150,000 less $125,452.17 = $24,547.83 PURE PROFIT!!! Do you think this is correct???
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