Real Estate Bargains

2 Responses to “If You Have An Investment Property In Australia When You Sell It How Much Do You Have To Pay Tax?”

1. Quaven on February 7th, 2010 at 11:18 pm

   If you own the property for less than 1 year, the difference between the sale and purchase price (less purchase and sale costs) is added to your income.
   If you* have owned the property for more than 1 year, then half the difference is added to your income.
   How much tax you pay depends on your income tax rate. The income tax rates are at the link below:
   e.g. Sale——–$400,000
   Purchase——-$300,000
   Capital Gain—$100,000
   Half Gain is—-$ 50,000
   Current income** — $40,000
   Add gain—————-$50,000
   Total Income ——– $90,000
   Tax on $90,000 is $23,850
   Tax on $40,000 is $ 7,350
   (Tax on $140,000 is $43,850 if held <1 year)
   Effectively, you pay $16,500 extra tax** on a $100,000 gain. That’s 16.5%.
   ($36,500 or 36.5% if held < 1 year)
   * If held in the name of a company, then different rules apply
   ** Different tax rates apply to different income levels, so the effective tax paid will be different if income is say $20,000 or $100,000. Check with your adviser before making any financial decision.
   *** Non-residents tax rates are different.
   # There are a number of strategies that can be used to reduce the tax upon sale.

2. Kelsey on February 8th, 2010 at 3:04 am

   It depends how long you’ve owned the property, how much you bought it for and what you sold it for. Check out the link below for some info or speak to your accountant.