Or maybe you’re just thinking of selling the house…either way it pays to be informed regarding any potential tax liabilities – agree?
When considering the tax implications of selling a house, you first need to consider the nature of the house, or the purpose for which it is held.
There are instances where taxpayers hold houses as trading stock, we won’t be discussing the tax implications in those cases here today – rather, I wanted to draw your attention to situations where houses are held as capital assets, and their sale may be subject to Capital Gains Tax (CGT).
It is widely understood that taxpayers do not have to pay any tax on the proceeds of selling their main residence – but if you have used your main residence for business purposes, there may in fact be a portion that is subject to tax.
In cases where the house has always been held as an investment, it is likely that the transaction will fall within the scope of CGT…
In either case, you should discuss the details with your accountant prior to arranging your sale, so that you are fully informed of the potential outcomes.
The type of information you’ll need to provide your accountant include:
- details of the acquisition date and price
- stamp duty and legal costs paid on purchase
- capital items acquired for the house during the time of ownership (including renovations)
- details of tax claims made (they may have this information if they have been preparing your tax returns)
Upon sale you will need to consider the following:
- sale date and price
- agent’s commission and other selling costs
- apportionment of sale price between property and fixtures and fittings
Your accountant will let you know if they need any further information, but having the above items ready will be to the benefit of both you and your accountant – and even if you’re not ready to sell, it’s a great idea to collate this information and keep it in a safe place anyway!
Regards
