If I am buying a house with my partner and we split up and he buys me out do I have to pay tax on the profit.?

Question

I need to know if I have to pay any tax on profit and how to assess what the profit is. Is it as simple as what I paid against how much I got back or is there another calculation involved? There would be no CGT implications as I have been living there since we started paying for it.

Thank You

Answer 1

Yes you pay taxes on any profit you make. However, you could find a CPA that can make it look like a loss.

Answer 2

No. You don't pay taxes on profits from selling an interest in property when it is a capital event (which leads to a capital gain). There are special rules for marriage breakdown rollovers, which you would consider before the main residence exemption. The marriage rollover exemption allows you to disregard any capital gain you make when you transfer your interest in the property to an ex. You can read more about it here (note - you would be defined as the "transferor spouse" because you are transferring your interest in the property to him when he "buys you out) and the conditions for the rollover to apply (a court order, etc):

http://www.ato.gov.au/individuals/conten...

Answer 3

It depends on how long you have lived in the house, and when you first bought it. If there is capital gains, there is some calculation involved; it's not a matter of simply deducting the original price. I would suggest you talk to a tax agent.