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Key Points on CGT:

  • Reporting: You must report capital gains and losses in your income tax return. The gain is added to your assessable income and can significantly impact the amount of tax you owe.

  • Payment: Although CGT is part of your income tax, it's not withheld like regular income tax. Therefore, it's crucial to calculate the potential tax and set aside funds to cover it.

  • Capital Losses: If you incur a capital loss, it can't be claimed against other income but can be used to offset capital gains.

  • Applicability: CGT applies to assets acquired after 20 September 1985, with certain exemptions.

  • Exemptions: Most personal assets, like your home, car, and personal use items (e.g., furniture), are exempt. Depreciating assets used for taxable purposes, such as business equipment or rental property fittings, are also exempt.

  • Timing: The capital gain or loss is typically recognized when you enter into the contract for disposal, not at settlement.

Capital Gains Tax Valuations

Marchese Property Valuations can provide a detailed valuation report for submission to the Australian Taxation Office (ATO) to calculate your Capital Gains Tax (CGT). This report is essential if your property is an investment, if you have made significant capital improvements to your residence, or when a property transitions from a deceased estate to beneficiaries or a superannuation fund.

What is Capital Gains Tax (CGT)?

Capital Gains Tax (CGT) applies when you sell a capital asset, such as real estate or shares, resulting in either a capital gain or loss. The capital gain or loss is the difference between the acquisition cost and the sale proceeds.