
Everything you need to know about capital gains
In Australia when you sell certain assets, such as an investment property, you could become liable to pay CGT. For the purposes of this article, and in the context of this site, we are going...
Appreciation refers to the increase in the value of an asset like a house, apartment or townhouse over time.
Appreciation refers to the increase in the value of an asset like a house, apartment or townhouse over time. This can occur as a result of numerous factors including improvements in the neighbourhood, growing demand for housing, or general economic growth.
Over the last 20 years in Australia, house and apartment prices have grown by roughly 6% and 4.4% respectively on an annual basis.
However, this can greatly differ between different locations and types of properties. This figure changes every year, with some periods even bearing a negative capital growth.
If you’re selling property that’s appreciated and isn’t your primary place of residence (PPOR), you’ll most likely have to pay capital gains tax (CGT). PPOR’s are not subject to this tax as it's recognised as these properties have not been bought primarily for investment reasons.
However If you're selling an investment property after one year, only half of your capital gain is subject to capital gains tax. For example, a capital gain of $20,000 would result in only $10,000 being subject to tax.
Compare your property to recent sales in the area to get a current market estimate.
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