What cheeses me off

[RooFlyer]

WcMO is Sydney trains, been waiting 30 mins at Central and am about to lose my table booking as a no show. Poor signage, too long between peak hour services.

This is why I always preference the bus, much more regular and you can get off when delays. First time on a train in Sydney since pre covid, I was right to avoid. Absolutely useless.

Sounds like things haven’t changed in 20 years. When I lived in Sydney in the late 1990s, I lived at Turramurra and caught the train in and out of the city. I got so fed up with train delays and cancellations that I eventually hired a valet parking spot in the city and drove myself to and from work, mostly out of rush hours and saved myself an hours commuting every day and a lot of stress.

 

[JohnK]

Whether you rent it out or not, if you never actually live in the property you are liable for capital gains tax when you sell it. So either way you need to be forced to lie to avoid paying tax!

That's a new one. I thought an investment had to be income producing to be eligible for capital gains. Very sneaky of the government. Tax on tax on tax.

But thank you for making me check. I want to sell an investment unit but have been waiting until I retire to reduce capital gain tax but seems that I can just stop renting it and then put some of my furniture in the place and send mail there for 12 months and capital tax avoided.

 

[Guvner]

Have a feeling that the real target of this (empty apartment buildings and other "banked" dwellings in Melbourne) are probably the last properties to be going off-grid. Can't really see a 40 story building in the Melbourne CBD, being strong candidates for going off grid.

And I'm sure for those who do go off-grid in the unlikely event they get drawn into this, they'll have plenty of evidence suggesting they live there to dispute the idea that the dwelling is vacant.

When I said future I didn't mean now.

 

[tgh]

put some of my furniture in the place and send mail there for 12 months and capital tax avoided

If only it was that easy….

 

[dajop]

That's a new one. I thought an investment had to be income producing to be eligible for capital gains. Very sneaky of the government. Tax on tax on tax.

It's not a tax on a tax on a tax. Simplistically, and purely at a personal level (ignoring trusts and companies owning houses), 50% of the profit you get from selling the house (what you received - what you paid - cost of major improvements you made) is considered income and thus is taxed like any income you receive that particular year. In fact it's not too bad - what other source of income does the government ignore half of it?

But thank you for making me check. I want to sell an investment unit but have been waiting until I retire to reduce capital gain tax but seems that I can just stop renting it and then put some of my furniture in the place and send mail there for 12 months and capital tax avoided.

Not so much, it's complicated. Bottom line, best position is that you need to move in there straight away after buying the place to count as your main place of residence and then you can move out and if you sell within 6 years - no capital gains tax*. Otherwise (again oversimplifying it) if you do live there for some time (but not straight away) , you get to reduce the amount of capital gain by the proportion of the overall time you had the property for that you lived in the house.

* I think you can also move back in again within 6 years for a while then move out again and have another 6 years up to a certain number of times.

 

[Ade]

Suicide

Suicide on Valentine's day?

 

[Pushka]

That's a new one. I thought an investment had to be income producing to be eligible for capital gains. Very sneaky of the government. Tax on tax on tax.

But thank you for making me check. I want to sell an investment unit but have been waiting until I retire to reduce capital gain tax but seems that I can just stop renting it and then put some of my furniture in the place and send mail there for 12 months and capital tax avoided.

Not a new thing at all. It's been around since the introduction of CGT in the late '80's.

 

[JohnK]

It's not a tax on a tax on a tax. Simplistically, and purely at a personal level (ignoring trusts and companies owning houses), 50% of the profit you get from selling the house (what you received - what you paid - cost of major improvements you made) is considered income and thus is taxed like any income you receive that particular year.

It is a tax and not sure why people are sugar coating it.

I buy an investment property and do not rent it out.

- I pay interest on mortgage
- I pay maintenance
- I pay for repairs

I then sell and the government wants a cut? It is stupid and I was really not aware of CGT on properties not income producing. I take all the risks. All the profit should be mine. I owe the government nothing.

P.S. There is another way. Sell property. Spend all the money and don't do tax return for many years. Then die. Surely they cannot find a way to get the CGT if the person that owns the property dies?

For anyone that wants to criticise then please go ahead. I have thick skin. I pay more than enough tax now. I will more than likely work until 67-68 years old and even then I will not have enough for a comfortable retirement and the government wants more from me? Stop handing out freebies to new arrivals. Let them work for it like I've been doing since 1983. Enough contributing to the welfare state. I owe nothing more.

 

[Pushka]

It is a tax and not sure why people are sugar coating it.

I buy an investment property and do not rent it out.

- I pay interest on mortgage
- I pay maintenance
- I pay for repairs

I then sell and the government wants a cut? It is stupid and I was really not aware of CGT on properties not income producing. I take all the risks. All the profit should be mine. I owe the government nothing.

P.S. There is another way. Sell property. Spend all the money and don't do tax return for many years. Then die. Surely they cannot find a way to get the CGT if the person that owns the property dies?

For anyone that wants to criticise then please go ahead. I have thick skin. I pay more than enough tax now. I will more than likely work until 67-68 years old and even then I will not have enough for a comfortable retirement and the government wants more from me? Stop handing out freebies to new arrivals. Let them work for it like I've been doing since 1983. Enough contributing to the welfare state. I owe nothing more.

No one said it wasn't a Tax. Thats why it's called CGT.

When you submit your tax return, you can claim all your interest, council rates, water rates, repairs, Insurances - ie all the costs of holding that property, from the price you sell it at. We did this just a couple of years ago. It sure adds up as a deduction. Then the difference is halved.

I never consider death as being a good way out of paying due taxes.

 

[tgh]

I am often amused when folks brag about how much they made on a real estate investment.
The reality is usually much less glossy when ALL the inputs, taxable and otherwise are accounted.

 

[dajop]

I then sell and the government wants a cut? It is stupid and I was really not aware of CGT on properties not income producing. I take all the risks. All the profit should be mine. I owe the government nothing.

You say “all the profit should be mine”. Take that statement to its ultimate conclusion so what you are really saying is that someone born wealthy and uses that wealth just to buy and sell homes (instead of working or running a business) - shouldn’t have to pay any tax on the profit they make from buying and selling - their only source of income

So is it fair that you toil away working for someone, paying tax to the government for every hour you work, meanwhile some rich dude doesn’t have to pay a cent in tax?

 

[CMA222]

@JohnK
Basically all property is subject to CGT. There are many rules relating to occupancy and use, but there is a principal place of residence exemption with complicated rules for actually using it as such. Just putting in furniture and having mail delivered does not make it your PPoR.

Dying owing the ATO tax just moves the obligation to your executor to settle the debt before any other bequests can be paid. If the executor sells a property as part of an estate and it was liable to CGT then the ATO gets paid out of the proceeds of the sale, to extinguish the debt. As the saying goes - the only things in life that are certain are death and taxes.

 

[Pushka]

I know it's essential but next year I must remember to be out the day the fire alarms are tested at the apartment. Every 20 minutes, off they go as they test random apartments.

 

[TheRealTMA]

I know it's essential but next year I must remember to be out the day the fire alarms are tested at the apartment. Every 20 minutes, off they go as they test random apartments.

Oh the joys of apartment living!

 

[RooFlyer]

It is a tax and not sure why people are sugar coating it.

Sure, they are sugar coating it by calling it a Capital Gains TAX.

I owe the government nothing.

You owe the government of proportion of your income, just like everyone else with a regular income. Or are you special?

Simplistically, and purely at a personal level (ignoring trusts and companies owning houses), 50% of the profit you get from selling the house (what you received - what you paid - cost of major improvements you made) is considered income and thus is taxed like any income you receive that particular year.

Is it 50%? Has the rate gone up? I sold my investment property about five years ago when I retired. I’d had it for 22 years, and I thought the rate I paid was 10% or 20%. The after CGT profit has funded half of my retirement.

Best investment I ever made.

 

[p--and--t]

Sure, they are sugar coating it by calling it a Capital Gains TAX.

You owe the government of proportion of your income, just like everyone else with a regular income. Or are you special?


Is it 50%? Has the rate gone up? I sold my investment property about five years ago when I retired. I’d had it for 22 years, and I thought the rate I paid was 10% or 20%. The after CGT profit has funded half of my retirement.

Best investment I ever made.

It's the profit times 50% times your marginal rate

Eg if your marginal rate is 30% you pay 15% of profit

 

[p--and--t]

Not a new thing at all. It's been around since the introduction of CGT in the late '80's.

Yep been around for ages.

Not payable on PPOR. You can only have one PPOR at any one time and you can still claim as PPOR for six years after vacating as long as you don't try and declare a new one (ie move into a rental).

If you sell a property that is not a PPOR then the profit (not sale price) is taxed at 50% times marginal rate. I.E. If you sell in a year your income below tax threshold (or accumulated losses) then you pay 50% times zero = zilch.

 

[dajop]

Yes the 50% I was talking about is 50% of the profit counts as taxable income. Not that it’s 50% tax. All of this with the proviso that the asset is held for >12 months. All bets are off and no discount if it is held for less than a year. All of the profit then counts as income.

 

[dajop]

Back to #WCMO, the trouble with all of this is there are so many nuances to tax that are difficult to grasp, such that any proposals for tax reform become impossible to get up - as vested interests will sing the loudest and scare most people into thinking the sky is falling in.

 

[dajop]

I.E. If you sell in a year your income below tax threshold (or accumulated losses) then you pay 50% times zero = zilch.

Depending of course on whether the income you generate (i,e, 50% of the profit) pushes you above the tax threshold or not!!