Sale of Rental Investment Property
Here is a list of information required to work out the capital gain / loss on the sale of your investment property
1-A full history of the property's use (from the day you bought it until the day it is sold)
-dates you lived in it
-dates it was used to earn rental or business income
-dates it was sitting idle
Where its use changed from a non-taxable to a taxable purpose (& vice versa) you'll need to obtain a professional valuation to determine it's value at the time its use changed
eg when it changed from being your Principle Place Of Residence (PPOR) to an Investment Property
The valuation needs to be from a qualified valuer noting that it is for capital gains tax purposes (a 2 page valuation from a local real estate agent won't be sufficient)
2-Whose name is on title (eg owned 50:50 between spouses)
If unsure refer to the title
If you can't find the title contact your bank or the titles office in your state
3-Purchase information
Purchase date (note that the purchase date is the contract date - not settlement date)
Purchase costs
-purchase price
-stamp duty
-conveyancer / legal fees
-adjustments
Other
-Div 43 depreciation claimed (Building) [your accountant will work this out]
-Div 40 depreciation balancing charge (Fittings & Furniture) [your accountant will work this out]
-You may be able to add to the purchase costs expenses which were not deductible in a prior year eg holding costs
4-Sale information
Sale date (note that the sale date is the contract date - not settlement date)
Selling costs
-sale price
-sales agent fee
-conveyancer / legal fees
-adjustments
Documents to supply
-purchase contract & settlement statement
-stamp duty payment amount
-sales contract & settlement statement
-anything else that may be relevant
Caital gains tax calculations
Sell price (your ownership share)
Less costs(your ownership share)
Equals gain / (loss) (your ownership share)
Less prior year carry forward capital losses
Sub-total
Less applicable discounts (individuals receive a 50% general capital gains discount where the property is owned >12mths)
Equals taxabble gain * / (loss)
You pay marginal income tax on the taxable gain *
Note- Capital losses are carried forward until they can be offset a future capital gain
Principle place of residence (PPOR) exemption
It must be established that it was your principle place of residence eg lived there for 6mths or more
You will need to have proof of this eg records from
-government agencies eg vic roads, medicare, electoral office, and
-other records eg bank, bills
You can only have 1 PPOR at a time so if you (or spouse) had another property at the same time you need to choose which one was your PPOR (assuming both properties qualified as PPOR)
 I18-Sale-of-Rental-Property-client-checklist.pdf (82kB) |