I really appreciate your time and effort for sharing your valuable knowledge with everyone. So very well explained and examples used are so helpful to understand and relate to technical words. Thank you so much.
I heard you say you prefer to not sell property at the start of the vid.How can you get the money out if you never sell?I have got some properties that I have had for 10-15 years. Thanks Michael
Eventually you will need to dispose of your properties, even if this occurs as part of your will/estate. Most strategies will involve kicking the can down the road and making the disposal when your other income is at its lowest. Otherwise, you can borrow against the properties (Banks will lend against the rental income). derek
Great video thanks! With regard to properties purchased prior to 1985 being CGT exempt; if a property was purchased by parents in 1970, and then titles transferred to siblings in 2010 (inheritance), then lived in by a sibling rent-free until 2020, and then titles transferred again to remaining siblings after the passing of the sibling (who was the sibling living in the property), and then remained vacant until sold at 2023, would this attract CGT? Apologies it is a little convoluted. Thanks
there shouldn't be any problems with CGT up to 2020 as it was used as a primary residence. After 2020 there might be a CGT issue as it wasn't used by any of the siblings as their primary residence. there may be CGT on the increase in value from 2020 to 2023. derek
great content derek! ive never understood why there's such arbitrary rules on CGT, particularly around asset classes like residential properties. really seems like public opinion has affected policy in a strange way. i always thought something like CGT would be uniform across all asset classes. unless youre well informed or can pay advisors, the unsophisticated investor could miss out on a lot of tax benefits.
If the property is for rental business purpose, can you claim cost of mortgage (interests) towards CGT calculations? Similarly, are you exempt from CGT if you reinvest the sale proceed into another rental property with in 2 years of sale? If there is a Trust Deed to stipulate that you are the legal owner but your son is the beneficiary owner and he has been receiving rents all this time, who is liable for CGT? Thanks. Excellent visual illustrations anyway !!
The interest on your mortgage would have been claimed in your yearly tax return as an expense item, you can't double-dip and claim it again. the re-investment rules (within 2 years only allowed if you sell an 'active asset' (business) and buy another 'active asset'. the tax liability will be whoever the distributions from the trust is made to, in might be your son, it will depend on what other income he has, how old he is. Talk to your accountant about who should get the income, that is usually reserved for the end of the year. derek
I have read that if you buy a investment property and then have to live in it for 6 months you are exempt for CGT. Is this true and how will this affect you when you have to buy your first residential property (FHOG, stamp duty etc..)?
If you have a property that is your principle place of residence, and you move out of that property (but don't move into another property that you own - ok to be renting) then you have 6 years from the day you move out for that property to remain as your principle place of residence and therefore CGT free. Derek
So, if I owned my own home, for decades... and also own 2 units.. and i want my kids to live in the units ..how do I/ what's the best way give/put the units into the kids name for the least amount of $$$ please and thank you
Your own home can be transferred/sold to your children without any CGT effect (there will be stamp duty). However, the investment properties will be subject to CGT when you transfer them.
i guess im randomly asking but does someone know of a trick to log back into an Instagram account..? I stupidly lost my account password. I appreciate any tips you can offer me.
Can we claim the interest on loans ,which is not claimed before in tax return? Our accountant didn't claim the interest rate for the initial few years of our investment property. PLS advice.
Just kidding I’m bit a Cpa but what if the property was in Perth but you lived in the USA which law would apply. It’s interesting theory but each country has different laws for federal tax but also each of the states has separate laws. Yes in the USA I think are separate laws.
I’m 18min and just realized that this came out of Australia. I should have checked the about-info, but a heads up in the beginning would have been nice.
This is the best explanation that I have seen on CGT. Have subscribed to your channel. Thank you for the great lesson (and usual buckets)
I really appreciate your time and effort for sharing your valuable knowledge with everyone. So very well explained and examples used are so helpful to understand and relate to technical words.
Thank you so much.
Glad it was helpful!
Wow very good explanations. Thanks for sharing your knowledge. Its very helpful
I heard you say you prefer to not sell property at the start of the vid.How can you get the money out if you never sell?I have got some properties that I have had for 10-15 years. Thanks Michael
Eventually you will need to dispose of your properties, even if this occurs as part of your will/estate. Most strategies will involve kicking the can down the road and making the disposal when your other income is at its lowest. Otherwise, you can borrow against the properties (Banks will lend against the rental income). derek
Great info video, many thanks. Just a note, the music was too loud to hear what you are saying in the last few minutes..
Thanks Ray, i think our video production has got better since we did this one
@@TwelveAccounting do you service Brisbane clients? I'm interested in engaging your services. Please advise. cheers.
Great video thanks! With regard to properties purchased prior to 1985 being CGT exempt; if a property was purchased by parents in 1970, and then titles transferred to siblings in 2010 (inheritance), then lived in by a sibling rent-free until 2020, and then titles transferred again to remaining siblings after the passing of the sibling (who was the sibling living in the property), and then remained vacant until sold at 2023, would this attract CGT? Apologies it is a little convoluted. Thanks
there shouldn't be any problems with CGT up to 2020 as it was used as a primary residence. After 2020 there might be a CGT issue as it wasn't used by any of the siblings as their primary residence. there may be CGT on the increase in value from 2020 to 2023. derek
great content derek! ive never understood why there's such arbitrary rules on CGT, particularly around asset classes like residential properties. really seems like public opinion has affected policy in a strange way. i always thought something like CGT would be uniform across all asset classes. unless youre well informed or can pay advisors, the unsophisticated investor could miss out on a lot of tax benefits.
If the property is for rental business purpose, can you claim cost of mortgage (interests) towards CGT calculations?
Similarly, are you exempt from CGT if you reinvest the sale proceed into another rental property with in 2 years of sale?
If there is a Trust Deed to stipulate that you are the legal owner but your son is the beneficiary owner and he has been receiving rents all this time, who is liable for CGT?
Thanks. Excellent visual illustrations anyway !!
The interest on your mortgage would have been claimed in your yearly tax return as an expense item, you can't double-dip and claim it again. the re-investment rules (within 2 years only allowed if you sell an 'active asset' (business) and buy another 'active asset'. the tax liability will be whoever the distributions from the trust is made to, in might be your son, it will depend on what other income he has, how old he is. Talk to your accountant about who should get the income, that is usually reserved for the end of the year. derek
Are the tax laws that you talk about still the same in 2021 ? Like after 12 months you split the capital gains ?
The 50% general CGT discount is still available
I have read that if you buy a investment property and then have to live in it for 6 months you are exempt for CGT. Is this true and how will this affect you when you have to buy your first residential property (FHOG, stamp duty etc..)?
If you have a property that is your principle place of residence, and you move out of that property (but don't move into another property that you own - ok to be renting) then you have 6 years from the day you move out for that property to remain as your principle place of residence and therefore CGT free. Derek
Thank you, very informative and clearly explained! 👍
So, if I owned my own home, for decades... and also own 2 units.. and i want my kids to live in the units ..how do I/ what's the best way give/put the units into the kids name for the least amount of $$$ please and thank you
Your own home can be transferred/sold to your children without any CGT effect (there will be stamp duty). However, the investment properties will be subject to CGT when you transfer them.
Does the 1/2 gain if you lived in it for more than 12 months still apply? I have not seen if this still applies
the 50% gain relates to any asset that you hold for greater than 12 months. derek
Can valuation method be used for changing investment property to primary place of residence?
Waiting reply please.
Absolutely loved this video. Thank you so much for this valuable information mate:)
i guess im randomly asking but does someone know of a trick to log back into an Instagram account..?
I stupidly lost my account password. I appreciate any tips you can offer me.
@@mohammadlouis3377 you might need to ask a 12 year old, they are good at things like that.
Can we claim the interest on loans ,which is not claimed before in tax return? Our accountant didn't claim the interest rate for the initial few years of our investment property. PLS advice.
you will need to go back an amend your previous tax return. you have two years to amed after it has been lodged. derek
Please let viewers know at the start that this does not apply to the US tax code for cap gain.
Can this be applied to the US ?
Umm. Good question what country are we in?
Just kidding I’m bit a Cpa but what if the property was in Perth but you lived in the USA which law would apply. It’s interesting theory but each country has different laws for federal tax but also each of the states has separate laws.
Yes in the USA I think are separate laws.
I’m 18min and just realized that this came out of Australia. I should have checked the about-info, but a heads up in the beginning would have been nice.
Note - this video pertains to Australian real estate