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Keep investment property or sell

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vanandrew View Drop Down
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Joined: 03/February/2016
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  Quote vanandrew Quote  Post ReplyReply Direct Link To This Post Topic: Keep investment property or sell
    Posted: 03/February/2016 at 16:23
I have an investment property and am wondering if long term financially it would be better to sell it or hold on to it.

Circumstances:
I bought the house 10 years ago to live in. Two years ago I moved out and got tenants in the house. I now live with my partner, who has her own house. My partner bought her house about three years ago.

I'm sure if long term it would be better to:
a) sell the investment property now. we'd put the money against my partner's mortgage, allowing us to pay it off in a few years
or
b) keep the investment property. This would give us a permanent extra source of income

Any advice welcome, thanks.

Luisa View Drop Down
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Joined: 08/June/2010
Location: Australia
Posts: 213
  Quote Luisa Quote  Post ReplyReply Direct Link To This Post Posted: 04/February/2016 at 12:15
if you keep it and rent it you pay tax
if you keep it and rent it and then sell you pay CGT

if you sell it now (I think) your CGT liability is little or none (but check that) and you get the cash to pay off the loan - BUT make sure you document in case of later separation as otherwise you might 'lose' your contribution

I suggest financial advise followed by legal advise but do it sooner rather than later, while records are fresh.

vanandrew View Drop Down
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  Quote vanandrew Quote  Post ReplyReply Direct Link To This Post Posted: 06/February/2016 at 13:35
Thanks very much Luisa.

Re: if you keep it and rent it and then sell you pay CGT

I don't know much about CGT - is it a significant cost? e.g. under the above scenario if the house was sold for $300,000 what might the CGT be approx?

Waringgal FS View Drop Down
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  Quote Waringgal FS Quote  Post ReplyReply Direct Link To This Post Posted: 11/April/2016 at 13:21
Originally posted by Luisa

if you keep it and rent it you pay tax
if you keep it and rent it and then sell you pay CGT

if you sell it now (I think) your CGT liability is little or none (but check that) and you get the cash to pay off the loan - BUT make sure you document in case of later separation as otherwise you might 'lose' your contribution

I suggest financial advise followed by legal advise but do it sooner rather than later, while records are fresh.



Agree. Better seek help from professionals before making any such actions. The information you will get from them would be a big contribution in making choices of what you plan to use.
Financial Planning Association of Australia.

Luisa View Drop Down
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  Quote Luisa Quote  Post ReplyReply Direct Link To This Post Posted: 15/April/2016 at 12:56
It's not that easy to calculate CGT. It depends on date bought, date disposed of, value at purchase, value at disposal, CPI in the intervening time, etc etc. You really need to get assistance, maybe speak with your accountant first.

richlike View Drop Down
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Joined: 27/April/2016
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  Quote richlike Quote  Post ReplyReply Direct Link To This Post Posted: 27/April/2016 at 23:19
I am Richard Collins. I represent a consortium of Investors whom are currently looking for good business men who they can entrust their funds on for the purpose of investment on any profitable business that has solid background. There minimum Investment amount is 1million USD and there Maximum is 500million USD depending on the nature and size of the project, they are not interested in a particular type of project or location per say all they want is a business which can make High returns on investments..if you are interested Please Get back to me through my private email: richlike.collins@gmail.com .

PauloFer View Drop Down
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  Quote PauloFer Quote  Post ReplyReply Direct Link To This Post Posted: 16/June/2016 at 23:22
it depends on what stage of a property market cycle the market is in (if you do not know what a property market cycle is, check https://tranio.com/traniopedia/tips/property_market_cycles_how_to_choose_the_best_moment_to_buy_property/). It is better to sell a house in the moment when expansion is tapering off or the market is about to peak. The difference between prices might be huge

webbrowan View Drop Down
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  Quote webbrowan Quote  Post ReplyReply Direct Link To This Post Posted: 04/October/2016 at 14:21
I personally would say to keep it for a long-term source of income and it just feels safer to have your own house even though your partner already has a separate one. You never know what could arise in the future so you would not need to worry about accommodation should things do not go as planned. Though you will have to pay tax but the amount is relatively tiny as compared to the monthly rental.
Best Regards
Rowan Webb

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