If I sell my half of a share-property, what would the Capital Gains
Tax implications be?
Q.
I currently have a 50% share in a rental property with my sister
which I have had for a couple of years. As I would like to sell,
she said she would buy me out, we currently owe $170,000 and if I
was to sell my profit share would be $45,000. How much Capital
Gains Tax do I have to pay? I have been told many answers; one
person said I would lose 50% of the profit. Is it worth selling or
having it for longer?
A.
The amount you owe on the property is not relevant. Your share
of the capital gain would be 50% of the difference between the
price you agree on for sale and the amount you paid for your share
plus your purchase costs. Because you have had the property for
over a year you are also entitled to a 50% discount on the CGT so
if you profit share is $45,000 the amount that will be added to
your taxable income is just $22,500. Your accountant will be able
to do the sums for you.
Each week financial advisor Noel Whittaker answers your
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