What amount of capital gains tax will I be liable for?
Q.
I bought a block of land about five years ago and it seems I
will never be able to afford to build on it so have decided to
sell. I stand to make $250k profit - what amount of capital gains
tax will I be liable for?
A.
You will be able to claim all buying and selling costs, as well
as expenses such as interest and land tax during the period of
ownership. If we assume these total $30,000 your profit will be
$220,000 but because you have owned the property for over a year
you will be entitled to the 15 percent discount. Therefore $110,000
will be added to the taxable income in the year the sales contract
was signed.
Each week financial advisor Noel Whittaker answers your
questions.
