The NSW Covid 19 Delta variant has retaken its toll since the last week. Today there are 22 new cases, and the NSW government had decided to lock down the four Local Government Areas, including the City of Sydney, Waverley, Woollahra and Randwick. So if you live or work in these four areas, we wish you the best, and stay strong and stay tough.
Many people had asked me whether they need to pay capital gains tax on the house they sell if they had lived in there. I would normally explain to them that there is the Capital Gains Tax in the Australian Taxation System. If you sell any capital asset, you need to be assessable on the income you derive on the sale of the capital asset. If you make a loss on the sale of the capital asset, you need to report that the loss can constitute a tax benefit, as you can use the capital loss to reduce any future capital gain accordingly.
Many people overlook one particular area, and that is when they paid a deposit for an off the plan property. Due to factors outside of their control, sometimes, they can not settle the property, and the vendor then needs to ask them to forfeit the deposit. It is important to remember that, at that time, they should seek professional taxation advice, as the leading CPA accountant in Ashfield Inner West Sydney and Adelaide, we had helped many clients to restructure their tax returns and help them to claim those expenses as a capital loss. Many people might ask me, what is the point in reporting those losses? Wouldn’t it be possible to report them at the time when I do have a capital gain?
My answer to those people would be, if you do that, then it is too late. Suppose you suddenly report a massive loss in a particular year, which is the carried over effect from the prior years. In that case, you will have a higher probability of getting an audit by the Australian Taxation Office.
Also, it is essential to point out that the Australian Taxation Office has many powers during the audit time. For example, they can allege you had made a mistake in the tax return; however, they do not need to prove it. The onus to confirm it is on you, and if they don’t accept your explanation, they will penalise you with the shortfall and the shortfall tax penalty.
Hence if you are thinking to sell a house or a property, please come and talk to us; as one of the leading CPA accounting firms in Inner West Sydney and Adelaide, we would be in a position to assist you with the issue.
Please give us a call on 1800 841 312 or email us to firstname.lastname@example.org