Advice Capital Gains Tax

[Die Krugers]

Hi Everyone

If you are thinking of not selling your house, and renting it out while in Australia, just remember a few things:

Firstly, you have to pay tax on rental income received in RSA, and from what I can gather, according to the double taxation agreement with Australia, you will not have to pay tax on the same amount in Australia.

If it is your house you are currently living in, please consider Capital Gains Tax! If you sell your house when in RSA while still living in it, you will be exempt from CGT for the first R1m profit you make, which will be the case for most people. But, if you move to Australia, and rent your house out, and decide to sell it later, you will pay CGT on the full profit you make on the sell (for most people it will be around 10-15% on the profit). So if you are planning to sell it somewhere in the future, just remember that you will get taxed on profits.

For this reason we have decided to sell our house while in RSA, and rent until we can go over, as it will save us about R60 000 on CGT!!

Hope it helps someone!

Tania

[Springbok]

But, if you move to Australia, and rent your house out, and decide to sell it later, you will pay CGT on the full profit you make on the sell (for most people it will be around 10-15% on the profit). So if you are planning to sell it somewhere in the future, just remember that you will get taxed on profits.

I am reasonably sure that you will only pay CGT on the portion of the time you did not live in your primary residence. So just take that into account and have proof of the time span that you actually lived in your own home and of the time span that you rented it out.

[Aramat]

If you sell your house when in RSA while still living in it, you will be exempt from CGT for the first R1m profit you make

As far as I know this is incorrect, you only pay CGT on secondary properties not on your primary residence.

I just sold my house for more than a mil, not paying CGT.

[Die Krugers]

As far as I know this is incorrect, you only pay CGT on secondary properties not on your primary residence.

I just sold my house for more than a mil, not paying CGT.

No, I don't think you understand. You don't pay CGT on the selling price, but on the profit you made from the sell.

[Springbok]

On your primary residence, the first R1 million of your PROFIT is excluded from the CGT calculation. e.g. if you bought your primary residence for R1 million and sold it for R2.5 million, your profit is R1.5 million, but CGT only applies to R500,000.

The R1 million exclusion does not apply to secondary homes.

[MMF]

Help me ook net asseblief. Soos ek verstaan sal ons geen CGT op die een betaal wat ons in bly nie, want die wins is minder as 1M en dan die ander twee sal ons op al die wins CGT betaal. So 10 tot 15%. m.a.w die agent se komissie is minder as wat jy belasting betaal.

[Die Krugers]

Hi Mercia

Ja, jy verstaan reg. Jy sal CGT betaal vir die ander twee huise waarin julle nie woon nie. Dit word uitgewerk teen 25% van die wins op die huis, gemaal met jou individuele belastingkoers waarop jy tans is, en werk soos ek gese het uit op plus minus 10-15 % van die wins.

Groete

Tania

[Pixi]

The primary residence exclusion nowadays is R1,5 million. The maximum GCT an indivudual can pay is 10%(40 * 25%) , Sprigbok is correct with apportionment (par 47 of eight schedule) and now the encouragement for people who stuggle to sell: par 48 allows a period of up to 2 years in which you can be absent from your primary residence and it will not be seen as absence (so you can have your full 1,5 mil) if: you offered it for sale and vacated it due to acquisition or intended acquisition of a new primary residence. Other words if you can proof (all you need is either a copy of the mandate you gave the agent, or even a newspaper add will do) that you wanted to sell, but could not find a buyer, 2 years grace is given before apportionment starts.