Thanks for your comment.

To read more on how claiming depreciation can impact a potential CGT event, please click here.

Thanks,
The BMT Team.

Thank you for your comment.

Your capital gain or capital loss is the difference between the asset’s cost and its termination value, reduced by the taxable use proportion.

The capital works deductions and the cost of the depreciable assets acquired with the property are both taken into consideration when determining CGT.

To view case studies BMT have prepared showing the difference in CGT with and without claiming depreciation, see https://www.bmtqs.com.au/maverick/mav-52-depreciation-and-cgt

You can use this ATO calculator to work out your CGT, including your capital proceeds and cost base: https://www.ato.gov.au/individuals/capital-gains-tax/calculating-your-cgt/

We recommend speaking with your tax adviser or accountant to discuss any questions you have regarding CGT and your specific investment scenario.

Thanks,
The BMT Team.

If I have the rental losses brought forward over the years, can I utilise the losses to reduce the capital gain?

Is it compulsory to deduct the depreciation to the rental loss?

Thanks for your comment.

The depreciation claimed on capital works will reduce the cost base, adding to the capital gain. However, if the property is sold and you have owned the property for greater than 12 months, only 50% of the capital gain will be added to your assessable income. Meaning only 50% of the capital works deductions will carry through to the CGT event.

Further general information about depreciation and CGT can be found in one of our past articles, https://www.bmtqs.com.au/maverick/mav-33-CGT

We also recommend to speak with your financial adviser or accountant to discuss the GST implications of your personal property investment scenarios.

Thanks,
The BMT Team

As a property investor of 3 properties since 2003 I am interested to know, if and when I sell one or more properties, after taking into account the 50% discount on the profit of sale do I have to add the depreciation that I claimed over the years when calculating CGT?

regards
Andrew

Thanks for your comment.

Your accountant will determine the tax payable on your capital gain when you lodge your 2019-20 tax return.

Thanks,
The BMT Team

Thanks for your comment.

When you sell an investment property, your capital gain is included in your assessable income for that financial year. This can only be included once you have made (payment received) the capital gain.

It’s important to discuss any questions you have about CGT with your accountant as only they can provide advice on how it is paid.

Thanks,
The BMT Team