What are the CGT implications on a property I have never lived in?
Q.
In 1998 I bought a flat in Western Australia and it has been
rented out for most of the 10 years. I have never lived in it as I
have been living overseas and not working. I am thinking of selling
the apartment but wonder if you can tell me how much CGT I would
have to pay and what the percentage is?
A.
As you have never lived in the property capital gains tax will
be levied on the entire capital gain. However, you will be entitled
to the 50% discount as you have held it for more than a year and
you can also deduct from the gross gain buying and selling expenses
and any capital improvements made by you during the time of
ownership. Make sure you ask your accountant to do the calculations
before you sign any sales contracts.
Each week financial advisor Noel Whittaker answers your
questions.
