Hi Thank you for explaining the CGT tax. We have built a house and our original contract with builder is much less in value as we upgraded a lot of things later. If we sell it the home in future can we claim those cost we invested later to make our CGT income less? Thank you
I’m not sure if 3.18 is correct. Maybe I’m wrong/missing something but I thought the 50% discount means 100k turns into 50k you need to pay tax on and because 50k belongs in a lower tax bracket, I plug that number into the ato calculator and I only have to pay 7.7k tax. Let me know if things changed. Cheers bro, I thought everything else was bang on!
Hey Erxi, Thanks for watching! You are technically correct as well. However, most clients have other income such as wages, rental income or dividends which pushes them on a tax rate of 32.5 - 45%. In the video we assumed 45% as when you sell a property its quite easy to hit the 45% tax rate. In your situation you are assuming the individual does not have any other income but the capital gain. This doesnt happen often in the real world. We dont take in consideration the tax free threshold and lower tax rates as that will be already used up by their wages and other income. Hope that makes sense!
Very useful info, but I have a question on @3:23 If I buy a land & do construction on that land for rent out for say 5 years & sell - that should be CGT discount eligible I guess, how is "Property Developer" classified.
Property development is quite detailed and complex. try reading how it works on the ato website and if it’s too difficult you may have to book in a meeting with an accountant when you are ready.
Thanks for the video Davie, I have a question for you. Say you took out equity from your principal place of residence and used it to build another home which would be tenanted, the interest paid on the equity loan is tax deductible? After a year of renting the new home out, you swap. So, the house you live in with the equity loan now has tenants and you move into the new home. Is remaining equity loan interest still deductible or is it only pro rata? Thank you, Sam
New home or old home? New home is not deductible anymore Old home the interest is tax deductible as it an investment property now. FYI I am only basing this on what you have mentions so don’t take this as advice. Best to get paid tax advice.
Hi, I moved into my investment property 6months ago and planning to stay for two more years. I have own it since 2015. can I add the interest, rates and any maintenance and upgrade cost to the cost base when I sell in two years time? thanks
Unfortunately no, you use to but they removed this about 3 years ago. You can find loads more info if you go onto the ATO website and search the terms Rental properties and travel expenses
@@DavieMach thanks for answering. Is it common to make profit on rental property? I made profit 3 years in a row and very worried if I did something wrong
@@user-sv5vj1mx4h well making a profit on rental property isnt a bad thing. It means your investments are making you money. Interest rates are quite low so if your rental yield is high then its most likely making a profit.
Very poor misleading advice. No mention of 6 year rule. Simple way to Not pay CGT is to move into your property before renting it out and to make sure that before the 6 years are up you move back in for a short time . The clock then resets for 6 years etc. The property can be classed as your primary property CGT exempt.
Very clear and helpful explanation mate. Thanks.
No worries, glad it was helpful!
Bro you’re the best, so simple and straight to the point.
This video was great. Thanks mate
Glad you enjoyed it
Hi
Thank you for explaining the CGT tax. We have built a house and our original contract with builder is much less in value as we upgraded a lot of things later. If we sell it the home in future can we claim those cost we invested later to make our CGT income less? Thank you
Learned something. Thanks mate!
Thanks for watching mate
Glad you did!
Excellent video thank you so much!
I’m not sure if 3.18 is correct. Maybe I’m wrong/missing something but I thought the 50% discount means 100k turns into 50k you need to pay tax on and because 50k belongs in a lower tax bracket, I plug that number into the ato calculator and I only have to pay 7.7k tax. Let me know if things changed. Cheers bro, I thought everything else was bang on!
Hey Erxi, Thanks for watching! You are technically correct as well. However, most clients have other income such as wages, rental income or dividends which pushes them on a tax rate of 32.5 - 45%. In the video we assumed 45% as when you sell a property its quite easy to hit the 45% tax rate.
In your situation you are assuming the individual does not have any other income but the capital gain. This doesnt happen often in the real world.
We dont take in consideration the tax free threshold and lower tax rates as that will be already used up by their wages and other income. Hope that makes sense!
Very useful info, but I have a question on @3:23 If I buy a land & do construction on that land for rent out for say 5 years & sell - that should be CGT discount eligible I guess, how is "Property Developer" classified.
Property development is quite detailed and complex. try reading how it works on the ato website and if it’s too difficult you may have to book in a meeting with an accountant when you are ready.
Thanks for the video Davie, I have a question for you.
Say you took out equity from your principal place of residence and used it to build another home which would be tenanted, the interest paid on the equity loan is tax deductible?
After a year of renting the new home out, you swap. So, the house you live in with the equity loan now has tenants and you move into the new home. Is remaining equity loan interest still deductible or is it only pro rata?
Thank you,
Sam
New home or old home?
New home is not deductible anymore
Old home the interest is tax deductible as it an investment property now.
FYI I am only basing this on what you have mentions so don’t take this as advice. Best to get paid tax advice.
Hi Thanks for you content,.
Do you need to value a property before you rent it out. if you live in it and then rent it?
Thanks if you can reply.
should i sell my PPOR to pay off 2 IP'S ? what tax implications would this have if i am payg ? regard chris
Good info
Glad it was helpful, Johnny!
Hi,
I moved into my investment property 6months ago and planning to stay for two more years. I have own it since 2015. can I add the interest, rates and any maintenance and upgrade
cost to the cost base when I sell in two years time? thanks
this is complex and best you speak to an accountant to get proper paid advice
Well explained
Can I claim travel and accommodation to rental properties for maintenance?
Unfortunately no, you use to but they removed this about 3 years ago.
You can find loads more info if you go onto the ATO website and search the terms
Rental properties and travel expenses
@@DavieMach what about if I drive to my property to maintain it? Can I claim the fuel costs?
@@NT-vb9vv not anymore unfortunately!
@@DavieMach thanks for answering. Is it common to make profit on rental property? I made profit 3 years in a row and very worried if I did something wrong
@@user-sv5vj1mx4h well making a profit on rental property isnt a bad thing. It means your investments are making you money.
Interest rates are quite low so if your rental yield is high then its most likely making a profit.
Very poor misleading advice. No mention of 6 year rule. Simple way to Not pay CGT is to move into your property before renting it out and to make sure that before the 6 years are up you move back in for a short time . The clock then resets for 6 years etc. The property can be classed as your primary property CGT exempt.