Capital Gains Valuation – Northern Rivers

Capital Gains Valuation. Properties that have been purchased post 1985 can be subject to Capital Gains Tax if they have been income producing.

Capital Gains Tax is assessable on the period in which the property was income producing. If the property was purchased in the open market and sold on the open market after a proper marketing campaign and always maintained as a rental property, the transaction is straight forward and a Valuer is not required. Complications arise if the property was owner occupied for a period which commonly occurs at the beginning of ownership. Often owners live in the house until they feel they need a change, they retain the property to rent after buying a second property, i.e the original property is now an investment property. A market valuation is needed to assess the market value at the time when the property was first rented as capital gains tax is applicable from that point on. If the owner moves out and rents the property, then at a later date moves back in, then a valuation is required at this time too.

The Taxation Office follows property sales and if a property that was used as income producing is sold, a flag is raised and questions asked. By preparing yourself with a valuation and providing it to your Accountant, any tax exposure can be dealt with in the particular financial year and thus averting any unwanted tax liabilities and penalties post the sale of the property.

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