When it comes to selling your property, there are a number of taxes you may encounter. Once such levy is capital gains tax.
There are many confusing issues surrounding what constitutes as capital gain or how it is calculated. With regard to property, the simplest explanation is that capital gain is a tax on the profit made from the sale of property or investment that was bought or acquired after September 20, 1985.
You generally do not pay capital gains tax on your principal place of residence. What that means is the capital gain or loss made on the sale of the house you live in normally is exempt from capital gains.
As long as you are living in the house, the property is classified as your main or principle place of residence. There are even some circumstances where you may be out of your home for a number of years with it still being classified as your primary residence. There are conditions that apply and it gets complicated, so you should discuss this with a tax professional.
The good news is that for many of us, when we buy a house we set about making it our home and generally live in it for a considerable time. The positive real estate trend in Australia has generally meant that property values increase over the long term. The end result is that whatever profits you can make when the time comes to sell your family home should be all yours!!!
Before you adopt any tax management strategy, make sure you discuss it with your tax professional, taking into account your own personal circumstances and goals.