Then sell it within six years so that you can apply the capital gains tax property 6 year rule and qualify for the main residence exemption. We go into all the different types of capital gains events in more detail below. Here are 5 tax planning ideas to reduce or eliminate CGT for long-term capital gains, which are net profits on investments held over a year, plus their pros and cons: 1. The tax traps wealth in an investment vehicle requiring special techniques to free the capital without penalty. Capital gains tax. So I want to talk about how to legally avoid CGT on investment property.. Letâs go through the different exemptions that may apply to you: ... Visit the Australian Taxation Office (ATO) website for more information on small business rollover. Real Estate Investments (REI) is one of the fastest emerging real estate investment firms. If you've got less than $500,000 in super, you can make catch-up contributions, writes John Wasiliev, who seeks answers to your superannuation questions. You are posted overseas for 5 years and you rent it out during your absence. Remember that your capital gains tax rate is based on your income, so your capital gain tax rate will be lower as well. How real estate investors can avoid capital gains tax. Understand what capital gains tax is and ways to reduce your tax bill. Capital gains tax does not apply when you sell your own home (your principal place of residence) but can create a significant dent in your profits when selling an investment property. To get around the capital gains tax, you need to live in your primary residence at least two of the five years before you sell it. Capital Gains Tax (or CGT) can be very annoying because you have to pay massive amounts of tax on the growth youâre experiencing. Visit the ATO website for a detailed explanation of the 4 small business CGT concessions. Capital Gains Tax (CGT) is a tax you pay on the sale of non-exempt assets in Australia that were acquired after the 20 September, 1985. You're not entitled to the exemption for a vacant block. According to the Australian Taxation Office (ATO), how it normally works is that any capital gain (profit) you make as a result of selling a capital asset is added to your assessable income for the year and taxed at your marginal rate . If you are in a lower capital gain tax bracket, potentially even the 0% bracket, it makes sense to go ahead and harvest those gains now to avoid having to do it later when your taxable income is higher. The capital gains tax is economically senseless. There are several methods a taxpayer can use to avoid or defer paying the capital gains tax on stock appreciation. You can then avoid paying Capital Gains Tax as long as none of these periods exceeds six years. While created as a guide only, it provides a useful breakdown of how your capital gains tax is calculated. Live in the property for at least 2 years. skip to content skip to navigate. Capital gains tax was introduced on 20 September 1985, so if your property was acquired before this time, then no CGT is payable. To avoid paying capital gains tax entirely, then make sure that the property remains your PPOR. The Federal Government has made changes to Australian Capital Gains Tax for non residents that impacts Australian expats who still own a property back home.. At the moment, the Australian Capital Gains Tax rate is 12.5 per cent, and expats could be hit with it if they try to sell their home in Australia after these new tax rules come into affect on 1 July, 2020. Our services work in a unique model that's an ideal fit for everyone -- property owners, sellers, investors, tycoons, you, ⦠You are liable to pay this tax when your capital gains exceed your capital losses in an income year. For example, if you spent $310,000 on buying a house years ago and sold it for $500,000 today, then your âcapital gainsâ would be $190,000, and youâd have to declare this amount along with your â¦