Income Tax on Sale of House

[Naz]

Hi guys,

do you need to pay tax in Oz on the sale of a property in SA -

the house is your primary residence in SA and does not attract CGT

do you simply disclose the interest in your OZ tax return and get taxed on that or do you have to show the income somewhere in the return ??

not sure...anyone had any similair experiences?

Been in country for 1.5 years, this is my second return

Thanks

[HadEnoughofJuju]

Our first tax return was done by a tax agent and the money we brought over from the sale of tlpur house was put.onto the tax return as tax free foreign income. Ypu may have to prove that tax was already paid but.you van do that with ypu tax returns from RSA.

P.S. I suggest you get a tax agent here to do the return on your behalf. The $110 you'll pay them is better than the tax you may have to pay if you do it wrong.

[Jordy]

Hugo, a tax expert gave a pretty comprehensive answer here yesterday http://www.saaustralia.org/index.php/topic/45498-sars-cgt-on-rented-properties-in-sa-help-please/

Not sure if it answers your question or not?

[Gerhardk]

The link Jordy provided deals with CGT in RSA.

Assuming you are a tax resident in Australia (not for example a temporary tax resident or foreign tax resident) and assuming you are renting in Australia and therefore the property in RSA is still your primary residence then you should not be liable for CGT in Australia.

If the house in RSA is worth more than $50k you would have indicated this in your prior year tax return - there is a question on this. For this year for the question whether you had a CGT event the answer will be 'Yes'. The software I use to lodge does not require any numbers but if it is required just make sure you select primary residence exemption.

[Hugo2]

Hi guys,

do you need to pay tax in Oz on the sale of a property in SA -

the house is your primary residence in SA and does not attract CGT

do you simply disclose the interest in your OZ tax return and get taxed on that or do you have to show the income somewhere in the return ??

not sure...anyone had any similair experiences?

Been in country for 1.5 years, this is my second return

Thanks

Naz

your primary residence exemption may be reduced below R2m by using 1.5yrs Oz/Yrs owned x R2m

If you exemption is reduced to say R1,8m and your gain is less than R1.8,m you may still be exempt.

Just be aware that the fact that it WAS your primary residence does not equate to a 100% tax exemption

The sale of <R2m house are also exempted IF only IF it is your primary residence at the date of sale

You sold 1.5 years after you left SA and it can't be a primary residence for the outside years (unless you return to SA and stayed in the house for a year before you sold)

I will leave the ATO question for others to answer

assuming you are renting in Australia and therefore the property in RSA is still your primary residence

This statement is not true for SA tax law. Primary residence is not determined with reference to rental vs ownership occupation in Oz

The link Jordy provided deals with CGT in RSA.

And is indeed relevant as Jordy probably picked up claiming primary residence status is not as easy as Naz assumed