You’ve read about taxes and buying property in QLD, but maybe you’re thinking ‘what if I’m selling? Is it the same?’ Unfortunately, life isn’t that simple. At H & H, we like to try and make things as simple as possible. That’s why we’ve put together this article outlining everything you need to know about taxes and selling in QLD.
(Credit: Corinne Kutz on Unsplash) Make sure you’re well across taxes and selling
Capital Gains Tax
This is the big one most people think about when they consider taxes and property sales. Put simply, capital gains tax is the tax paid on the difference between the purchase price and the sale price should the sale price result in a profit. It applies to the sale of any item valued at $10,000 or more.
So, how much is capital gains tax?
This is where it can get a little bit complicated. Capital gains is not a stand-alone tax, rather it is included with your income tax.
If you’ve bought or sold a property within the last 12 months, your net gain (the difference between your the sum of your capital gains and capital losses) is added to your taxable income. In turn, your tax will be a bit higher than normal.
If you’ve owned the property for longer than 12 months, calculating your taxable income is not as simple as adding your net gain to your earned income. There are two ways to work it out, which you can find more details about here.
While there is no way out of paying capital gains, you can make efforts to reduce your payable amount. Keep all receipts that are relevant to the sale of the property. If you can prove your cost base for selling was higher, it’ll close the gap a bit and minimise the amount of capital gains you’ll have to pay.
(Credit: Raw Pixel on Pexel) Capital gains tax tends to confuse a lot of sellers
Not taxes but….
There are other fees and costs associated with the sale of a property. It’s important to be aware of financial outlays from the get-go so you won’t be caught out.
Real Estate Agent Fees
You will have to compensate your agent for their efforts in selling your house. Agents will firstly charge a commission for their services, which is a percentage of the sale value of the property, and for any marketing they conduct.
This will include any posters, flyers, professional photoshoots, advertisements in digital and print media, and public relations they utilise to sell your property.
While it can seem like a better idea to save some money and find an agent that charges less, this can end up costing you more in the long run. It’s alright to save a couple thousand in initial outlay. However, wouldn’t it be better to spend it now and have the right agent get you tens of thousands more with the right marketing campaign?
(Credit: Raw Pixel on Pexels) Some people plan to save money. At H & H, we encourage planning to make money
Legal fees
While it’s not necessary, it’s strongly advised to involve a solicitor when selling your property. They will be able to draft and check over contracts, handle your receipts at settlement, and transfer deeds and property titles from one person to another.
You’ll save yourself a lot of money and difficulty by doing this right the first time around.
(Credit: Helloquence on Unsplash) Legal advice can make things less stressful
Make sure everything is ship-shape
There are certain things you’ll want to double-check prior to selling your property that may require a small outlay. For example, properties built prior to 1992 may not have safety switches. This will need to be rectified prior to selling. Additionally, all properties are legally obliged to comply with strict smoke alarm requirements. There must be photoelectric smoke alarms in every room, in hallways connecting rooms, and on each level of the house.
Finally, a termite inspection would be a good idea. Normally the cost is worn by the prospective buyer. However, the sale of your property could go far more smoothly should you provide certification yourself.
(Credit: Pixabay on Pexels) Ensuring switches are current with legislation will save you time in selling
Renovations
Sometimes little renovations can add so much value to your property. They don’t have to be a major expense either. Freshening up kitchen and bathroom spaces can do untold wonders for the listing price, and it can be as simple as a lick of paint and some new cabinet knobs.
If your property is looking a little drab, you can have a designer come through and give some expert advice on where small improvements can be made. If it’s an alteration that could add tens of thousands, isn’t it worth considering?
(Credit: Bill Oxford on Unsplash) A fresh coat of paint can make a world of difference
