Property Tax Tips
3 Smart Tax Tips for Property Owners
Tax considerations form a large part of any successful property investment strategy. For property owners and investors, working with professionals such as an accountant, financial planner, or conveyancer can help streamline your strategy and help you better understand regulations that pertain to tax and the purchasing and selling process. In this article, we look at 10 practical ways to reduce your tax liability and ensure compliance.
1. Capital Gains Tax
Capital gains tax (‘CGT’) is probably one of the most important tax considerations for those planning to sell their property in the short or medium term. In Australia, a CGT event occurs when you sell a property (or other capital assets) acquired after September 20, 1985. The CGT you pay depends on your taxable income at the time you sell the asset.
However, exemptions apply. The most well-known exemption is the main residence exemption, which means CGT is not applicable when the property has served as a main residence. A 50 per cent discount is also available if the property has been held for at least 12 months.