Holiday Homes or Rental Properties and CGT
Holiday homes can be a get-away sanctuary of a home away from home, a place where family memories can be made. When considering selling your holiday home it’s worth considering the Capital Gains Tax (CGT)
If your holiday home was owned prior to September 20th 1985 then you don’t need to worry about CGT. But if your holiday home was owned after that date, because your holiday home is not your main primary residence, it is subject to CGT.
When you sell or dispose of a holiday home or rental property you may make a capital gain or loss.
A capital gain or loss is the difference between what it cost you to obtain and improve the property (the cost base) and the amount you receive when you dispose of it.
If you make a:
- net capital gain in an income year, you’ll generally be liable for capital gains tax (CGT)
- net capital loss, you can carry it forward and deduct it from your capital gains in later years.
Use the ATO’s calculator to calculate your CGT.
Keeping good records for the duration of the holiday house/rental property is important throughout your time of ownership as it’s almost impossible to substantiate claims without proper records.
If you have any queries relating to holiday homes or rental properties and CGT please don’t hesitate to get in contact with us at STS Accounting.
