Should she sell to avoid capital gains tax or hold?

O

onion33

Posting a question for my sister.

She has a townhouse in Brunswick Vic. When she moved out, it was valued at 600k. It would now sell for about $730k. She would pay very little capital gains tax.

Should she sell now to avoid paying higher cgt?
Or hold as long as possible?

Thank you. If I've missed out important info to help make the decision, please let me know
 
Is this an investment property?

Anyway regardless, if she doesn't need the money then I don't see any reason why to sell the property. With regards to less CGT..:eek: not a good reason
 
So your asking should she sell now while she's only made a little profit so she can avoid making a bigger profit later, thereby avoiding paying extra tax. :confused::confused:Really??

Why not sell it for $600k and she won't have to pay any tax.;)
 
If you can find data that shows the growth occurred while she was living in the prop there is no gain. I'd sell it for a number of reasons.

High cost to hold. This IP would cost alot to hold out of your back pocket whereas you could hold two properties worth $450k each in a medium ring suburb so you're holding $900k of asset for the same money or less out of your back pocket.

Poor future valuations which diminishes usable equity slowing portfolio growth
This property is far from ideal to build future weath due to its price being above the median for TH. Check this video which explains valuers mentality http://openwealthcreation.com.au/fi...valuers-and-median-property-wealth-wod-ep-49/

Hope this helps
Cam
[email protected]
 
Cammclellan said:
If you can find data that shows the growth occurred while she was living in the prop there is no gain. I'd sell it for a number of reasons.

High cost to hold. This IP would cost alot to hold out of your back pocket whereas you could hold two properties worth $450k each in a medium ring suburb so you're holding $900k of asset for the same money or less out of your back pocket.

Poor future valuations which diminishes usable equity slowing portfolio growth
This property is far from ideal to build future weath due to its price being above the median for TH. Check this video which explains valuers mentality http://openwealthcreation.com.au/fi...valuers-and-median-property-wealth-wod-ep-49/

Hope this helps
Cam
[email protected]
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O...M..G....

I thought I had heard it all........and then someone else shocks the hell outta me again.........I'm beginning to think that SS is abit of a death-trap for newbies......
 
Cammclellan said:
I'm not sure why you're so aggressive. I'm curious to find out exactly why you think it's rediculous.
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oh gimme a break...

Any halfwit investor knows the reasons you gave to sell this guys IP are ridiculous im not even bothered to tear it apart. The more nonsense that is said on this forum, the more dangerous this place gets for newbies.
 
Cammclellan said:
If you can find data that shows the growth occurred while she was living in the prop there is no gain.

]
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I think fullylucky is channelling his spreadsheets to you. (I mean in relation to the sentence I have quoted rather than anything else you have posted as you have obviously put thought into your methods)

If Onion's sister moved into the property as soon as possible after settlement and she and any partner did not have any other PPOR during that time or after then the gain might be CGT free.

The value at the time she moved out was$600k, so if she had moved into the property ASAP after settlement the base for CGT is reset to $600k

If shevdid not move in straight away then the value at the time she moved out is irrelevant.

If she is intending to sell she should get competent advice from an accountant.

Otherwise she needs to consider the opportunity cost of selling vs keeping. But as other posters have said tax should not be the motivating factor of her decision. Otherwise travelbug has the answer - lets see does she sell to travelbug and give him a gift of $130,000 or does she sell at $730,000 and pay at most something like $30,000 tax and keep $100,000 for herself.
 
Someone shoot me, but what Cammclellan has stated makes perfect sense to me and selling the property IMO is dependent on a number of factors that need to be considered.

I know we are all in love with property, however markets do not continue to rise forever, what C mentioned is very important, holding costs can be a killer, and can actually slow the investing process/opportunities and ignoring where/what the market is doing can cost investors dearly

MTR:)
 
Last edited:
LeoT said:
oh gimme a break...

Any halfwit investor knows the reasons you gave to sell this guys IP are ridiculous im not even bothered to tear it apart. The more nonsense that is said on this forum, the more dangerous this place gets for newbies.
Click to expand...

What would I know. I must just be a half wit investor. ;)
 
jrc said:
I think fullylucky is channelling his spreadsheets to you. (I mean in relation to the sentence I have quoted rather than anything else you have posted as you have obviously put thought into your methods)

.
Click to expand...

Haven't met fullylucky but I do love a spreadsheet.
 
Cam I didn't mean to come off so harsh. I just think its impossible to advise to sell something with the little information given.
 
No probs. I'm not easily offended. I do know the area and TH product very well in comparison to a raft of other investment options in the Melbourne market so maybe I had a bit more insight than you may have thought. All good.
 
onion33 said:
Posting a question for my sister.

She has a townhouse in Brunswick Vic. When she moved out, it was valued at 600k. It would now sell for about $730k. She would pay very little capital gains tax.

Should she sell now to avoid paying higher cgt?
Or hold as long as possible?

Thank you. If I've missed out important info to help make the decision, please let me know
Click to expand...

Impossible to answer such a question, except with 'it depends'.
What the rent is
growth prospects
what she would do with the money
other deductible debt?
married or spouse?
age
income level - could she buy another?

etc etc
 
Oops. Forgot to say she bought it for $320k and lived in it. When she moved out it was valued at $600k and is now rented out. She has a large non-ductable debt on her ppor with her husband so that would be the reason for selling (to reduce the ppor debt).
 
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