If you sell a property that is your main residence, are you liable for Capital Gains Tax ?

Answer 1

Hi,

I assume that since this question was posted in Taxes - Australia & New Zealand that you are an Australian. Be careful of the anwser above me (phillip's answer) - I think he may have thought that this was an American question (check out his sources!)

In Australia, Capital Gains Tax is not payable on the sale of a primary residence provided that the residence was not used for income producing purposes. A property is also exempt from Capital Gains Tax is it was purchased prior to 20 September 1985.

CGT is quite complex. You should probably speak with a tax agent/accountant to be 100% sure of the facts - I'm sure you do not want the surprise of a CGT liability arising on some sort of technicality.

Cheers,
Richard

Answer 2

Note: This question was inadvertently answered as if a United States tax question! I apologize to my friends in Australia and New Zealand, for the error.

If there is a capital gain on the sale of your main home, there may be a capital gains tax, unless the amount of the gain was equal to, or less than, the exclusion amount of $250,000 ($500,000, if married and filing a joint return), and you met the 1) ownership test, 2) the use test and 3) you did not exclude gain from the sale of another home, during the two years preceding the sale of your current main home.

Phil
http://www.phillipfostercpa.com/tax.html

Answer 3

If the quick sale value is decrease than you paid for the residing house then there is not any earnings. at the same time as that's in a lot of circumstances the case it really is not any longer consistently so. i have dealt with a pair contained in the previous few years the position the residing house were paid off and the owner took out a loan to fund different issues which incorporates holidays (dumb) autos (virtually as dumb) or a business organization start up-up (in elementary words semi-dumb) notwithstanding the quick-promote value replaced into notably larger than the unique purchase value 20 to 40 years in the previous. if so, the regulations on the sale of a personal position of abode kick in and would avert capital helpful homes taxes. in between the circumstances that I dealt with, the residing house replaced into an funding property and the owner replaced into hit with important capital helpful homes tax extremely once the depreciation recapture replaced into taken into consideration. that's thoroughly break free the cancellation of debt earnings and there is not any way round it. Insolvency with reference to the canceled debt is thoroughly break free any capital helpful homes tax subject matters. contained in the worst case problem you would have both a taxable capital earnings and COD earnings that won't be able to be excluded. it really is a truly uncommon problem yet isn't no longer possible by technique of any ability. with out understanding each and each of the suitable numbers and info on your case it really is not any longer possible to assert if there should be any capital helpful homes tax due or no longer. mostly you does no longer, notwithstanding it really is the perfect possible answer with the minimum coaching accessible.

Answer 4

The person who answered NO to this doesn't know what they're talking about. Yes, you very well could be. That's why you're given 18 months to reinvest in another home, so you don't have to pay capital gains.

Answer 5

This is the Australian Tax Office official line on CGT:

http://www.ato.gov.au/individuals/content.asp?doc=/content/36878.htm&pc=001/002/026/016/003&mnu=5060&mfp=001&st=&cy=1

For further advice you need to speak to an accountant.

Answer 6

If you have lived and owned the house for total of 2 out of the past 5 years. you can exclude up to $250,000 of the GAIN thats tax free.
if you have a spouse also lived in that house for total of 2 years out of the past 5 years. you can exclude an additional $250,000 of gains.
thats UP TO 500,000 in Gains from sales of your house.

Answer 7

No, as long as it was your primary residence you are free and clear...party on!