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Patrick H.
Patrick H., Lawyer
Category: Australia Law
Satisfied Customers: 5361
Experience:  Dip Law LPAB - Sydney based lawyer
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I built a property which I intended to move into. Eventually

Customer Question

I built a property which I intended to move into. Eventually I decided, for various reasons, that I didn't want to move into it and to sell it.
Now the tax office wants me to pay capital gains tax even though it was never rented and I never claimed it as a business.
I'm not sure what my question is, I think it is : "what is the tax law on this?"
Submitted: 1 year ago.
Category: Australia Law
Expert:  Patrick H. replied 1 year ago.

Thank you for your question.

Capital gains tax applies to most assets you buy and then sell. It doesn't matter whether it was a business asset or not.

There are certain exemptions, such as where a property is your home, but if you don't qualify for that exemption because you never lived in the property then unfortunately you will be liable for capital gains tax.

The exemption is set out here in the Income Tax Assessment Act, but as you will see it only applies if you lived in the property throughout:

http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.110.html

Here is the ATO guide on the issue:

https://www.ato.gov.au/General/capital-gains-tax/your-home-and-other-real-estate/selling-your-home/

I trust the above assists your understanding.

PLEASE RATE MY ANSWER.

Patrick

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