Capital Gains Tax Explained

CapitalViewThe Australian mania for property investment means that many of us have to grapple with the concept of capital gains tax, but it's commonly misunderstood. The Australian Taxation Office has a useful primer on capital gains.

Picture by funkybug

One useful link within that primer defines exactly what a "main residence" is — you don't have to pay capital gains tax if you sell your main residence, but if you sell a secondary investment property, you're liable for CGT in the year the sale takes place. There are rules determining whether a property qualifies as your "main residence", but they're not absolute — each case is assessed on its merits (something to bear in mind if you move out of a house you own and begin renting it out).

Introduction to capital gains tax [ATO]


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