What are the capital gains tax implications for selling my rental
property?
Q.
I bought a flat in Western Australia in 1998 and it has been
rented for almost the entire time since purchase. I lived overseas
during this period and have not worked. I am now thinking I would
like to sell the apartment but I wonder how much I would have to
pay in capital gains tax. What is the percentage in question?
A.
Your accountant will be able to do the numbers for you but a
simple answer is that the capital gain will be calculated by taking
the purchase costs, including all purchase expenses, from the net
sales price. Any capital improvements made during the period of
ownership will also be taken into account. Once this figure has
been calculated it will be divided by two because you have had the
property for over a year and this final amount will be added to
your taxable income in the year the sales contract is signed. Just
make sure you seek advice before you sign any contracts.
Each week financial advisor Noel Whittaker answers your
questions.
