Contrary to popular belief, there is no specific capital gains tax rate. If you sell a property then the profit, plus or minus a myriad of adjustments, is added to your taxable income and taxed accordingly.

So, if you income is $100k, and you make $50k taxable profit from the sale of a property (that is net of the adjustments), then the $50k will be taxed at your marginal tax rate – in this case 39% including Medicare levy.

As a result, it is important to strategise the best time to sell a property. If there might be fluctuations in your income in the future – eg, you will have a period of leave without pay, you will be salary sacrificing into superannuation or you are about to retire – it is definitely worthwhile taking those events into account when considering when to sell a property or shares. Don’t forget, though, that the capital gains tax is deemed to have been liable on the date that you signed the contract, not the settlement date.

Talk to your accountant about how to minimise your capital gains tax.


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