What taxes arise when selling property?
Question from Mark Doggett updated on 20th June 2007:
Our expert responded:
There are two gains that arise on the sale of a rental property. The first gain is from the depreciation recovered. This is a taxable gain which means that there will be tax to pay. The second gain is the gain on the sale of the property, that is, any amount received over and above your original purchase price. Assuming your intention at the time of purchasing the property was to own the property long term, then this gain will not be taxed as it is a capital gain.
Kenina Court is a director of Acorn Solutions Limited, an accounting firm dedicated to working with clients to help them create wealth. She is an avid property investor, entrepreneur and seminar presenter on asset protection and wealth strategies.