Rural property “Carrol” purchased by my father 1924, left to my mother, brother and me not know by me 1976 – left to my two sisters by mother 1983, handled by a solicitor.
I purchased from sister 2002- for $82,000. I am selling the property now – $1.5 mil.
As it has been from one family member to another, are there any capital gains tax or stamp duty issues?
Given the change in beneficial ownership when you acquired the property, there is no doubt that the property is subject to Capital Gains Tax (CGT).
As you have held the property for longer than 12 months, a 50% reduction applies, meaning only half the capital gain will be assessable.
There are also some further possible exemptions:
- The principal place of residence exemption if you have lived in the property – the value of the dwelling and the surrounding 5 acres may be exempt from CGT.
- If the land was used in farming or any associated business for at least 7.5 years in the period of ownership, allowing it to qualify as an active asset, it is also possible that the CGT Small Business Concessions may apply. This could reduce the capital gain by at least 75%, with the possibility of the capital gain being eliminated.