Developers and apartment buyers have a narrowing window of opportunity before Brisbane's Olympic infrastructure pipeline begins competing directly with residential construction, pushing up costs, tightening labour supply and making new projects increasingly difficult to deliver.

While Brisbane's apartment market continues to benefit from strong population growth and limited housing supply, industry research suggests the years leading up to 2027 could prove to be the most important period for developers looking to secure builders and buyers hoping to purchase before the next wave of price increases.

A new Colliers report, Brisbane 2032 Olympic and Paralympic Games: Creating Solutions, highlights the scale of the challenge. While thousands of new homes are planned across South East Queensland, the Brisbane Olympic Athletes Village alone will deliver more than 10,500 beds during the Games before being converted into around 1,750 to 2,000 apartments. Equivalent to almost two years of typical inner-city apartment supply, the project will also absorb a significant share of the construction workforce and building materials.

The broader construction pipeline paints an even clearer picture.

Construction Skills Queensland's Horizon 2032 report forecasts Queensland's annual construction pipeline will average $69 billion over the coming years before peaking at $75 billion in 2027-28. Demand for construction workers is expected to increase by 17 per cent to almost 150,000 people, with the industry facing an annual shortfall of around 19,000 workers that could blow out to as many as 35,000 during the peak construction period.

The Olympic venues, athletes village and supporting infrastructure will account for billions of dollars worth of work across South East Queensland through to 2032, creating intense competition for labour at a time when Australia's residential construction sector is already under pressure.

[smartcode_project:default project_id=150489 project_image_fid=373834]

Colliers Queensland Residential Director Andrew Scriven said the convergence of these projects is creating a clear window of opportunity for both developers and buyers.

"From 2027 onwards, the market will shift dramatically," Scriven said.

"Labour will increasingly be locked into government-led infrastructure and Olympic projects, which means private residential developments will face higher costs and tighter margins. The developers who move now are the ones most likely to get projects off the ground."

Scriven said the same dynamic would also affect buyers, with fewer apartment projects expected to launch once construction capacity tightens.

"If you're looking to change your lifestyle over the next five years, now is your window of opportunity to buy."

[smartcode_project:default project_id=150713 project_image_fid=373827]

Developers are already positioning themselves ahead of that window.

Following the success of Monarch at Toowong, Consolidated Properties is preparing to launch two new Brisbane apartment projects in the second half of 2026. They include <a href="https://www.apartments.com.au/new-apartments/gloriette-30-bedivere-street-yeerongpilly-qld-4105">Gloriette</a> at Yeerongpilly Green, a 25-storey tower within one of Brisbane's key Olympic precincts, and <a href="https://www.apartments.com.au/new-apartments/castile-47-skyring-terrace-newstead-qld-4006">Castile</a>, a recently approved 25-storey riverfront development at 47 Skyring Terrace in Newstead.

Hutchinson Builders will deliver both projects, with early works already underway at Yeerongpilly and Newstead expected to commence later this year.

The timing comes as Brisbane's fundamentals continue to strengthen, with strong interstate migration, population growth and vacancy rates remaining below 1.5 per cent.

Colliers Queensland researcher Pragya Sharma said Greater Brisbane is forecast to require around 40,000 new apartments between 2021 and 2031.

"There's a real mismatch emerging between when housing is needed and when it will be feasible to build," Sharma said.

"As a result, the period leading up to 2027 presents a key window of opportunity for developers to secure approvals, funding and construction capacity, while buyers will have greater choice before supply constraints intensify."

Colliers research outlines a critical pre-2027 window to start residential projects before labour squeeze: now is the time to buy

Joel Robinson

Developers, buyers on watch in South East Queensland ahead of construction crunch: Colliers

It's taken less than nine months for developer Sherpa Property Group to sell out all 51 apartments in its <a href="https://www.apartments.com.au/new-apartments/flourish-oasis-palm-beach-7-9-sixth-avenue-palm-beach-qld-4221">Flourish Oasis</a> development in <a href="https://www.apartments.com.au/developments/palm-beach-qld-4221">Palm Beach</a>, over a year before its anticipated completion.

&nbsp;

Located at 7-9 Sixth Avenue, the $67 million development has resonated strongly with both local owner-occupiers and downsizers seeking high-quality apartments within walking distance of the beach, dining precincts and everyday amenities.

[smartcode_project:default project_id=151449 project_image_fid=357458]

Christie Leet, Founder of <a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Group</a>, said the sell-out reflected both the strength of the Palm Beach market and the success of Sherpa's community-first approach to development.

"The sell-out of Oasis is a fantastic outcome and reinforces the strong demand we're seeing for thoughtfully designed apartments in lifestyle locations," Leet said.

"From the outset, our vision was to create a development that genuinely enhanced the Palm Beach community while providing residents with exceptional homes and wellness-focused amenities.

"We've been incredibly encouraged by the level of local support throughout the campaign, 72.5 per cent of buyers are locals, with a significant proportion of purchasers choosing Oasis as their future home rather than an investment."

[smartcode_project:default project_id=151449 project_image_fid=357463]

Construction is now progressing following development approval, with trusted builder LPS Group delivering the project and completion anticipated in Q3 2027.

Oasis forms part of Sherpa Group's successful Flourish collection, which has become recognised for its focus on wellness, community and elevated coastal living.

[smartcode_project:default project_id=151449 project_image_fid=357469]

Residents will have private access to a rooftop amenity space featuring a pool, gym, sauna, steam room, hot and cold plunge pools, spa and barbecue facilities.

"The success of Oasis demonstrates that buyers continue to prioritise quality, location and lifestyle," Leet said.

"We are proud to have delivered a project that has resonated so strongly with the market and look forward to bringing Oasis to life for our future residents."

Sherpa recently launched <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a>, its third instalment of the Flourish brand in Palm Beach following Flourish Oasis and <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>.

[smartcode_project_cta:default project_id=151449]

Sherpa sells out Flourish Oasis in booming Palm Beach

Urban Property Group's <a href="https://www.apartments.com.au/new-apartments/la-vera-macquarie-park-94-talavera-road-macquarie-park-nsw-2113">La Vera</a> is leading the next phase of Macquarie Park's residential evolution, with the new apartment development set to become the first of several new apartment projects in the precinct to complete.

The 169-apartment building has now topped out ahead of its scheduled completion in the third quarter of 2026, as new residential investment continues to reshape one of Sydney's largest employment hubs into a true mixed-use precinct.

[smartcode_project:default project_id=134951 project_image_fid=368645]

Cox Architecture has designed La Vera to capture the best of its unique positioning on Talavera Road, orienting the building towards Lane Cove National Park.&nbsp;The building features a sculpted northern façade with flowing curves inspired by the surrounding landscape, while its city-facing elevation adopts a more structured architectural expression to maximise skyline views.

"The vision for the project was to conceive a building that adopted an organic and curvilinear form to the northern portion that faces the Lane Cove National Park," <a href="https://www.apartments.com.au/architects/cox-architecture">Cox Architecture</a> Director Felipe Miranda said.

"The residents that reside in the northern portion of the building benefit by having beautifully crafted curved balconies that speak to the natural context and heighten the relationship of their internal living spaces to the external balconies."

[smartcode_project:default project_id=134951 project_image_fid=358802]

La Vera offers a diverse mix of one, two, three, and four-bedroom configurations, with prices currently starting from $740,000. Buyers so far have been a mix of Sydney-based investors,&nbsp;metro commuters, owner-occupiers and downsizers from surrounding North Shore suburbs.

Both investors and owner-occupiers have been drawn to La Vera's proximity to Macquarie University, Macquarie University Hospital, Macquarie Centre and the Sydney Metro, infrastructure that supports both strong rental demand and a convenient lifestyle for residents.

The apartments feature full-height glazing, timber flooring throughout living areas, stone kitchen benchtops, SMEG appliances, floor-to-ceiling bathroom tiling and ducted air conditioning.

Residents will have access to a rooftop recreation level featuring a swimming pool, sauna, barbecue facilities and landscaped relaxation areas, complemented by additional communal space at ground level. Many apartments enjoy uninterrupted views across Lane Cove National Park, reinforcing the project's connection to its natural setting.

[smartcode_project:default project_id=134951 project_image_fid=364551]

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a>, a family-owned developer and builder with nearly four decades of experience, holds a 4.5-star iCIRT rating and was Australia's first developer to introduce 10-Year Latent Defects Insurance (LDI). La Vera is the first apartment development in <a href="https://www.apartments.com.au/developments/macquarie-park-nsw-2113">Macquarie Park</a> approved to offer the additional insurance protection, alongside a five-year warranty on SMEG appliances.

Urban Property Group CEO Patrick Elias said the additional protection reflects changing buyer expectations in the off the plan market.

"Consumers are a lot more weary and a lot more concerned in buying off the plan than they ever have been. Having LDI is a tool to portray the confidence that we have in our product, and a confidence we want buyers to share," Elias said.

Following completion of the building later this year, buyers will move into their apartments well before Christmas.

[smartcode_project_cta:default project_id=134951]

La Vera closes in on completion as Macquarie Park continues residential transformation

Brisbane developer Red &amp; Co's decision to include dual key apartments in its debut Gold Coast apartment development, <a href="https://www.apartments.com.au/new-apartments/como-varsity-lakes-22-lake-street-varsity-lakes-qld-4227">COMO Varsity Lakes</a>, is proving to be one of the project's biggest drawcards, with buyers quickly snapping up the flexible residences.

More than half of the project's 36 dual key apartments have already sold, helping drive COMO beyond the 50 per cent sold mark within the first month of launch.

The strong response highlights growing demand for apartment designs that can adapt to changing lifestyles, with buyers increasingly looking for homes that accommodate multi-generational living, provide rental income opportunities or simply offer greater flexibility over time.

Located on the shores of Lake Orr, COMO will deliver 156 apartments across 16 levels, with the dual-key residences forming a limited release within the broader development.

Each combines a primary two-bedroom apartment with a fully self-contained studio on a single title, connected by a shared foyer and lockable internal door. The design allows owners to house ageing parents, adult children or guests while maintaining privacy, or lease the secondary residence to generate additional income.

Just 17 of the original 36 dual key apartments remain available.

[smartcode_project:default project_id=135546 project_image_fid=367096]

The innovative configuration combines two fully self-contained residences on a single title, typically comprising a primary two-bedroom apartment alongside a separate studio residence, connected via a shared foyer and lockable internal door.&nbsp;

The model is proving particularly attractive to owner occupiers navigating changing family dynamics and the realities of the current housing crisis.&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363511]

<a href="https://www.apartments.com.au/project-marketer/npa">NPA</a>&nbsp;CEO Andrew Erwin said dual key living was resonating strongly with modern buyers because it delivered both financial flexibility and practical lifestyle benefits.&nbsp;

“The housing crisis and rising cost of living are fundamentally changing how Australians think about home ownership,” Erwin said.&nbsp;

“Dual key apartments provide a genuine solution for families who want to stay connected while maintaining independence. Parents can help adult children save for a future home, ageing parents can remain nearby without moving into aged care, and owners still retain privacy and flexibility.

“Importantly, buyers are also recognising the financial advantages. It creates the opportunity to generate additional income from part of the home without the holding costs associated with owning a separate investment property.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363509]

Unlike traditional dual occupancy arrangements, the residences operate under a single title, meaning owners only incur one set of body corporate fees, council rates and holding costs.&nbsp;

The secondary residence can also evolve over time - functioning as guest accommodation, a home office, creative studio or private retreat before later becoming an income-producing asset.

<a href="https://www.apartments.com.au/developers/red-co">Red &amp; Co</a>&nbsp;Director and Co-Founder David Laverty said the strong early sales reflected growing buyer urgency and changing priorities within the market.&nbsp;

“Securing more than half of COMO’s residences within such a short timeframe is an outstanding result and a clear endorsement of both the design and location,” Laverty said.&nbsp;

“Buyers are responding to the combination of location, connectivity and amenity, but ultimately it’s value relative to other East Coast markets that is driving enquiry.”&nbsp;

“We’re also seeing strong interest from owner occupiers looking for homes that can adapt with them over time. Flexibility has become one of the most important considerations for buyers in today’s market.”&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363515]

Designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, COMO features a mix of one-, two- and three-bedroom residences with 2.7-metre ceilings and larger-format floorplans aimed at owner occupiers, downsizers and lifestyle-focused buyers.&nbsp;

The development will feature an extensive rooftop recreation and wellness offering including a 25-metre lap pool, sundeck, barbecue and dining areas, gym, sauna, plunge baths, landscaped gardens, wellness spaces and rooftop pickleball and paddleball courts.

The remaining dual key apartments range from 137 sqm to 167 sqm and include generous three-bedroom layouts with separate self-contained studio accommodation and dual parking.&nbsp;

Erwin said the dual key concept represented a broader shift in how Australians would live in the future.

“People want homes that can evolve with their lives,” he said.&nbsp;

“A dual key apartment can suit a family today, support an ageing parent tomorrow, and potentially generate income later on. That adaptability is becoming incredibly valuable in the current environment.”

Prices currently range from $2,115,750 to $2,583,000.&nbsp;

[smartcode_project_cta:default project_id=135546]

Inter-generational living drives demand for COMO’s dual key apartments as housing pressures reshape buyer priorities 

Builder-developer&nbsp;<a href="https://www.apartments.com.au/developers/ceerose">Ceerose</a> has doubled down on its Leichhardt ambitions, lodging its second State Significant Development Application (SSDA) in the suburb in the last six months.

Their newest proposal seeks to transform a former industrial precinct into a new residential community centred around the adaptive reuse of one of the site's heritage warehouse buildings.

The new project, on a 6,930 sqm block at&nbsp;<a href="https://www.apartments.com.au/new-apartments/40-76-william-street-leichhardt-nsw-2040">40–76 William Street</a>, will bring more than 200 apartments to a suburb that has seen little to no new supply in recent years. It follows Ceerose's late 2025 SSDA for a mixed-use apartment project on nearby Parramatta Road, signalling the developer's growing investment in Sydney's Inner West.

Ceerose Founder Edward Doueihi told Apartments.com.au the developer’s long-standing presence in Leichhardt and the Inner West had given it a strong understanding of how the area has evolved and where its future opportunities lie.

“Ceerose has had a long-standing presence in Leichhardt and the Inner West, giving us a unique understanding of the area’s evolution and future potential,” Doueihi said.

“Having delivered projects throughout the region, we have witnessed the suburb’s transformation first-hand and understand the opportunities for its continued growth.”

Doueihi said that understanding also informed the planning process, with a comprehensive Stakeholder Engagement Outcomes Report prepared before the application was lodged.

The report identified the key issues and concerns raised by neighbouring residents and other stakeholders, allowing those matters to be considered and incorporated into the design where appropriate.

He said the delivery of additional housing would also play an important role in supporting the revitalisation of Norton Street and the Italian Forum.

“By increasing the local residential population, the development is expected to strengthen demand for local businesses, encourage further investment, and help restore the vibrancy that made the precinct a thriving destination in the early 2000s.”

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="7258c54c-8167-479e-8361-2d5fca9915b4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010B%20-%20CGI%20-%20View%202.jpg?VersionId=S9DQfxu_jpcB5LrAEYFUbyMzg5odW6i5" />

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, the redevelopment would involve the demolition of four existing industrial buildings while retaining and adaptively reusing the site's most significant warehouse. The retained structure would anchor a new residential precinct comprising five interconnected buildings arranged around a large central landscaped courtyard, with heights stepping from five storeys along the surrounding residential streets to 11 storeys at the William Street corner.

According to the Architecture Design Report by Woods Bagot, the proposal "seeks to create a residential village centred around a generous green heart while celebrating the site's industrial heritage through the adaptive reuse of the existing warehouse building."

The development would comprise 203 apartments, with 188 proposed as build-to-sell residences, alongside 15 affordable housing apartments.

Rather than treating the retained warehouse as a standalone heritage object, Woods Bagot has sought to weave the site's industrial history throughout the masterplan. The proposal retains the north and west facades of the landmark corner warehouse, while new buildings reinterpret the site's brick-and-steel industrial language through their material palette and architectural expression.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="9e8c64c2-881b-49e1-8c90-6b6acaaa45b6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010C%20-%20CGI%20-%20View%203.jpg?VersionId=Qm8_8H_Xrg_sc4Mdjc59vlAcKF_5wRTb" />

The design is organised around what Woods Bagot describes as a "green heart", a landscaped communal open space that reinstates the leafy character removed when the site became an industrial storage facility. A new pedestrian laneway running through the site would improve permeability between William, North and Francis streets, linking residents through landscaped public spaces while activating the ground plane.

Residents would have access to communal gardens and shared recreation areas distributed throughout the development. Sustainability has also been prioritised, with the project targeting an average 7.9-star NatHERS rating. Proposed initiatives include rooftop solar generation, rainwater harvesting, passive solar design, naturally ventilated lobbies, extensive cross-ventilation and the reuse of existing building fabric to reduce embodied carbon.

The adaptive reuse strategy became a defining feature of the application after heritage investigations found only one of the site's industrial buildings could feasibly be retained. The Heritage Impact Statement concludes that preserving the key warehouse façades while referencing the site's industrial character throughout the new development provides an appropriate balance between renewal and conservation.

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="efffafdb-594f-4e2b-a067-921fd51c05e1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010D%20-%20CGI%20-%20View%204.jpg?VersionId=DPmE4.k16YRt0i27hEZVtJAffarpvUfx" />

"Retention and adaptation of the site buildings has been explored but found not to be feasible except for the tallest building, whose street facades will be retained," the heritage report states.

"The proposed building will interpret the brick and steel character of the subject site, including reuse of some components and construction of a large 'sawtooth' structure in the proposed open space."

<img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="3bfef2b5-83f5-40cd-9cab-767092f34266" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010E%20-%20CGI%20-%20View%205.jpg?VersionId=7asb3i_ql4ybbuJOUb5UHBEIy0Q9t.DF" />

The William Street site is located around 300 metres from Leichhardt North Light Rail station and a short walk to Norton Street's retail, dining and hospitality precinct. The surrounding area has increasingly become a focus for urban renewal given its proximity to public transport and the Parramatta Road corridor.

Doueihi founded Ceerose in 1998 and has grown the business to become one of Sydney's more active apartment developers in recent years, with completed projects including The Alex Collective in Alexandria, Abbie's Lane in Annandale, and the award-winning Munro House in Elizabeth Bay. They are currently delivering Belgravia, 17 luxury apartments in Potts Point.

First look: Ceerose doubles down in Leichhardt with adaptive reuse of former warehouse site

Capital Gains Tax

<html><body>
Capital appreciation often forms a large part of the return on an investment property. In general, investors are liable to pay tax on that capital gain.
This is part of a series. To see Part 1, common misconceptions around capital gains tax, <a href="/expert-insights/finance/capital-gains-tax-explained-part-1-common-misconceptions">click here</a>. To see part 2, around capital gains tax payable on deceased estates, <a href="/expert-insights/finance/capital-gains-tax-explained-part-2-deceased-estates">click here</a>. 
The rules on when and how much tax applies are not straightforward, particularly when the investment property starts out as the owner’s primary residence, or becomes the owner’s home after having been rented out for a period of time.
“The fundamental principal is that a taxpayer’s main residence is exempt from CGT and that a taxpayer can only have one main residence,” says HLB Mann Judd director of tax Bill Nussbaum.
“Commonly, circumstances can change, especially when the main residence is also used for income producing purposes for certain periods of ownership. Such circumstances include absences from the property and renting out the property for the first time.”
Nussbaum prepared the following case study examples for Property Observer to illustrate the CGT outcomes in various situations. Each person’s circumstances are different and you should seek professional tax advice if you have questions on how CGT applies to your situation.
Primary residence becomes an investment property Absences &amp; the “Six Year Rule”
<ol start="2">
<li>The main residence home is rented out as the taxpayer is transferred to another city/overseas or decides to move to rented accommodation and keep the existing home. 
</li>
<li>Home therefore stops being a “main residence”. 
</li>
<li>The “Six Year Rule” allows the taxpayer to continue to treat the home as their main residence for a maximum period of six years (See Example 1) 
</li>
<li>If the taxpayer moves back into the property after having rented it out for some time and re-establishes it as the main residence, a further period of six years starts to run if the property is rented again in the future. 
</li>
<li>If the “Six Year Rule” is breached, as the property is rented for more than six years, then a partial exemption is applicable (See Example 2)</li>
</ol>
Special rules
<ol>
<li>In addition to the “Six Year Rule”, there is also a special rule for properties which first become income producing after August 20, 1996.</li>
</ol>
<ol start="2">
<li>The Special Rule relates to determining the cost base of the property. 
</li>
<li>The property is assumed for tax purposes to have been acquired at its market value when it was first rented out, rather than the actual purchase price.</li>
</ol>
Example 1: Dwelling first used to produce income – “Six Year Rule” On July 1, 1994 Bev paid $250,000 for a house that she used as her main residence until July 1, 2007, at which time its market value was $350,000. If Bev then rented the house until she sold it before July 1, 2013, she would still be able to claim a full CGT exemption by relying on the six-year extended exemption. She would not have to pay CGT on the sale proceeds.
Example 2: Dwelling first used to produce income – Breaching the “Six Year Rule” Following on from Example 1, if Bev continued to rent the house before selling it for $700,000 on July 1, 2014 (seven years after its first income use), she could only claim a partial exemption for CGT. In that case, the market value of the house at the time of its first income use ($350,000 on July 1, 2007) is used to determine the capital gain because the property first became income-producing after August 8, 1996. The capital gain in this case is $350,000 ($700,000 − $350,000 = $350,000). The taxable capital gain would be worked out (ignoring leap years) as follows:
<table border="0" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td width="14%">
$350,000 ×
</td>
<td width="85%">
 365 days  (non-main residence days) 2,555 days (days in deemed ownership period)
</td>
</tr>
<tr>
<td colspan="2" width="100%">
= $50,000
</td>
</tr>
</tbody></table>
Since Bev has held the property for more than 12 months, a 50% CGT discount would apply. She would have to pay CGT at her marginal tax rate on $25,000 (ie 50% of the $50,000 capital gain).
Investment property becomes a main residence
Only a partial main residence exemption is available if a property is initially rented out as an investment and then becomes the taxpayer’s main residence for part of the ownership period. If the residence is used as a rental property initially, the overall capital gain on eventual disposal is reduced via a pro rata apportionment by reference to the period the taxpayer used the property as their main residence, as explained in Example 3.
Example 3: Former investment property- now main residence
Lisa acquired a dwelling on October 19, 2008 which she let out to tenants until October 21, 2011. From that date she used the dwelling as her main residence. Lisa eventually sold the dwelling on September 7, 2013 and made a capital gain of $40,000, calculated without regard to the CGT exemption provisions. The capital gain is reduced pro rata by reference to the period Lisa used the dwelling as her main residence. The reduced capital gain is:
<table border="0" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td width="12%">
$40,000 ×
</td>
<td width="88%">
1,098 (number of days from October 19, 2008 to October 21, 2011) 1,785 (number of days of Lisa’s ownership)
</td>
</tr>
<tr>
<td colspan="2" width="100%">
= $24,605
</td>
</tr>
</tbody></table>
As Lisa has owned the property for more than 12 months, she would be entitled to the CGT discount and would have to pay tax on $12,302.50 (50% of $24,605).
Do you have any queries about CGT? Email <a href="mailto:news@propertyobserver.com.au" target="_blank">news@propertyobserver.com.au</a>
</body></html>

zfielding-GvX3Uq9KTa

Capital gains tax explained, Part 3: Investment property appreciation

<html><body>
HLB Mann Judd director of tax Bill Nussbaum spoke to Zoe Fielding about the rules that apply to capital gains tax (CGT) on deceased estates.

This is a continuation from Part 1: <a href="/expert-insights/finance/capital-gains-tax-explained-part-1-common-misconceptions">Common misconceptions around capital gains tax</a>.

“There are no death duties in Australia and a main residence property acquired from a deceased estate is generally not subject to CGT,” says HLB Mann Judd director of tax Bill Nussbaum. “However there are some important rules to consider to ensure the CGT exempt status is not lost.”

Pre-CGT Property 

Capital gains tax was introduced on September 20, 1985. Nussbaum says that if the deceased person acquired the main residence on or before September 19, 1985, the following rules apply:

<ol>
<li>The property is CGT exempt if it is sold within two years of deceased’s death. 
	 </li>
	<li>It is still CGT exempt if sold after  two years, providing the following tests are met:
	<ul>
<li>The property was not used to produce income (rented out)</li>
		<li>It was the main residence of the person inheriting the property, for example the deceased’s spouse or an individual having a right of occupancy the property under the will.</li>
	</ul>
</li>
</ol>
[smartcode_project:default project_id=7633]

Post-CGT Property

If the deceased person bought their main residence after September 19, 1985, stricter tests apply to determine whether gains on the sale of the property will be subject to CGT.

All conditions noted above must be satisfied. In addition, the property must have been the deceased person’s main residence just before their death and not used to produce assessable income at that time.

Investment properties of the deceased

Generally, no CGT is payable on the transfer of a property to a beneficiary under a will. CGT will be applicable when the property is eventually sold by the beneficiary. The cost base is calculated as follows:

<ul>
<li>For pre-CGT investments properties the cost base is calculated based on the market value of the property at the deceased date of death. </li>
	<li>For post-CGT investment properties the cost base is calculated based on the deceased’s original cost.</li>
	<li>The 50% CGT discount also applies to the sale of inherited properties that have been held for more than 12 months. </li>
</ul>
To read the third part of this series, Investment property appreciation, <a href="/expert-insights/finance/capital-gains-tax-explained-part-3-investment-property-appreciation">click here.</a>
</body></html>

Capital gains tax explained, Part 2: Deceased estates

<html><body>
Questions on capital gains tax on investment property were among the top five queries to financial advisers during this month’s Financial Planning Week, the Financial Planning Association says.
Australians’ love of residential property and the favourable tax treatment of investments in real estate mean capital gains tax is on many people’s radars, explained Stephan Strategic Certified Financial Planner, Joe Stephan.
“People are happy to reduce tax now through strategies such as negative gearing but eventually there will be a capital gain and there will be tax to pay,” said Stephan, who lectured on taxation at La Trobe University.
Capital gains tax (CGT) can be confusing, particularly if the property was purchased before September 21, 1999 when the rules were simplified.
There are variations in the way the tax is applied depending on the situation. For example, CGT paid on investments held inside superannuation is different from CGT paid on assets held by an individual.
“It’s also tied with timing,” Stephan says. “How long you hold an asset determines how much you pay.”
A common misconception about CGT is that it is charged at a flat rate. That’s not the case, said Stephan.
“The amount paid depends on your marginal tax rate and that depends on the income you generate,” he added.
This means it can be tax effective to time the disposal of an asset so that the sale goes through in a year when the person’s taxable income will be lower.
“Sometimes people like to wait until they are getting towards retirements and start taking an income stream from their private pension so they don’t have to pay any income tax. Then their capital gain is assessable at a lower tax rate,” Stephan said.
CGT was introduced in 1985, so the sale proceeds of properties that were bought before then are not subject to the tax.
The CGT discount was introduced on 21 September, 1999. This is a 50% discount that applies to the capital gain made on assets bought since that date if they have been held for more than one year, Stephan explained.
Most people understand there is no CGT to pay on the sale of the family home, said Stephan, but many people are confused by the special rules that apply to other properties, such as an inherited home.
“You don’t have to pay CGT on inherited property unless you sell it. The cost base might change and not be the purchase price but you don’t pay CGT until the property is sold,” Stephan said.
Different rules apply when people turn their home into a rental property or move into a property that was formerly an investment. Stephan warns that some mortgages do not allow the property to be converted into an investment. For simplicity, some people like to sell up and buy another similar property rather than converting the property’s use.
This is the first in a series of three articles explaining CGT. To see Part 2: Deceased estates, <a href="/expert-insights/finance/capital-gains-tax-explained-part-2-deceased-estates">click here</a>. To see Part 3: Investment property appreciation, <a href="/expert-insights/finance/capital-gains-tax-explained-part-3-investment-property-appreciation">click here</a>. 
</body></html>

Capital gains tax explained, Part 1: Common misconceptions

<html><body>
The Australian Taxation Office has been monitoring the impacts of offshore capital on local developer’s decisions to sell out.
The ATO’s Deputy Commissioner Tim Dyce advised recently the tax office had begun auditing property developers ­carrying out activities which conflict with their stated purpose of capital investment.
“A growing number of property developers are using trusts to suggest a development is a capital asset to generate rental income and claim the 50% capital gains discount,” Dyce was reported as telling the Australian Financial Review.
Developers need to be careful when seeking the 50% discount on any capital gain on the sale of property which they had held for development and not as a long-term investment.
The developer will have to prove to the tax office the true intention of the property, making sure there was never any marketing for a development or that there were never any internal minutes documenting an intention to develop.
</body></html>

jchancellor-FAypfDUnLy

ATO warn developers over capital gains tax

<html><body>
GUEST OBSERVATION
Husband and wives often regard themselves as jointly owning the assets each possesses. "What's mine is yours" and vice versa. In a happy relationship, that's all well and good, but unfortunately, the tax law can intervene to take some of the shine off such scenarios.
In a recent case before the Administrative Appeal Tribunal (AAT), a husband inherited 200 Telstra shares and 1,315 Commonwealth Bank shares from his father's estate. He transferred the shares into the names of himself and his wife to reflect his wife – who he considered at all times as a joint owner of the shares – as an owner of these shares.
However, the transfer of the shares to joint names produced a capital gain of over $19,000 which was included in his tax return for the 2013 tax year. Under the tax law, the share transfer caused a "CGT event" to occur.
The AAT confirmed the husband was liable for CGT (capital gains tax) on the transaction. It did so on the basis of finding that the taxpayer had disposed of a 50% interest in his shares and that this triggered CGT event A1. After the transfer, the husband and wife were treated by the system of taxing capital gains as each owned a 50% share of each of those shares, and before the transfer the husband was recognised as the sole owner of those shares. As a result, the husband was assessable on the capital gain made on the transfer.
The husband argued he and his wife regarded themselves as joint owners of all that they collectively owned. He believed from the outset that, in equity and morally, the shares transferred were owned "jointly". He also claimed he did not make any capital gain because he had not received anything and if he knew he would be subject to tax on the transfer, he would not have transferred the shares. All a very neat logical argument, but unfortunately the tax law does not operate that way.
The tribunal said it might well be, "and in some cases understandably so", that partners to a marriage or a marriage-like relationship regard his or her assets as "our assets". And it might also be the case for family law purposes, regarding the practical effect of ownership of assets by individual partners to those relationships.
But the AAT said Australian income tax law does not recognise these sorts of joint asset ownership arrangements. The transfer of the shares fell squarely within the terms of CGT event A1 (a disposal of an asset) and shares were clearly a CGT asset.
The tax law as applied to the facts in this case could only result in the outcome found by the AAT.
However, the AAT took the opportunity to issue a salutary caution: "Unless there is reason to do otherwise, partners to a marriage or marriage-like relationship who hold the assumption that his or her assets are our assets, would be well advised to continue with that assumption, without taking the step of formalising any joint ownership arrangements, as there will be a taxing point if they do if the transferred assets have increased in value".
To a seasoned tax practitioner, this might be Tax 101, but it is not difficult to appreciate that the views held by the husband and wife in this case, unversed in the ways of the tax law, might indeed be held by many in the community. In this case, their tax agent properly ascertained the situation and correctly lodged the tax returns.   
Terry Hayes is the editor-in-chief of tax news reporting at <a href="https://www.thomsonreuters.com.au/">Thomson Reuters</a>, a leading Australian provider of tax, accounting and legal information solutions.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
</body></html>

thayes-XhNcNKLNWa

Husband and wife, sharing and caring, until tax law do us part

<html><body>
Hi Margaret
My father has owned his 150 acre property since the '60s. He subdivided the land into three 50 acre blocks in the '90s, but he still owned all three blocks. He lives on one block and is intending to pass a vacant block into my name so I can build my home on it. All blocks are used for a farming business, however he has no taxable income. He is registered for GST.
There is no way to avoid the capital gains tax (CGT) when he places it in my name is there? 
Do you know roughly how much he will have to pay? The CGT calculators don't make sense to me. Even if I do not pay for the block, it is worth about $800,000. The three blocks were purchased for $60,000 in the 60s so the one would have been $20,000.
Many thanks,
Alan from WA
Margaret's answer on the next page. Please click below.
<hr class="system-pagebreak">
Hi Alan,
As you father owned the block in the pre CGT days, this block is still a pre-CGT asset. Subdividing the one pre-CGT asset into three does not changed the pre-CGT status and subdividing does not result in capital gain or capital loss. 
Although your father will make a capital gain when he sells (or passes title of) the block to you, the date he acquired the block is considered to be the date that he acquired the original parcel of land, and the cost base of the original land is divided between the subdivided blocks on a reasonable basis. Therefore there is not CGT for your father to pay at all.
More importantly for you is considering how you will receive this block of land, and in what entity.  If you plan to live there then it may become your principal place of residence, and later if you sell there may be CGT consequences from the date you acquired the land in your name. This is because any part of the land over five acres attracts capital gains tax and cannot use the principal place of residence exemption. 
If you are going to conduct a farm then it could be considered business real property, or the part where the farm is conducted could be. It’s worth considering potentially using a self-managed superannuation structure, as business real property can be transferred into super even if it has initially been given to you.
In any event, my advice is for you to seek quality accounting advice before the transfer takes place. This will allow you to ensure that the right structures are in place from the outset.
Kind regards
Margaret
Have a property question? <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
</body></html>

mlomas-KC9MUPZ6Ca

My father subdivided a property he's owned since the '60s, does he have to pay CGT?

<html><body>
GUEST OBSERVATION
Under the capital gains tax laws, taxpayers can be entitled to small business capital gains tax concessions which can, depending on the circumstances, either reduce or eliminate any capital gain made. <a href="https://www.smartcompany.com.au/finance/tax/34073-capital-gains-tax-get-your-house-in-order" target="_blank" style="line-height: 1.3em;">The concessions</a> are very beneficial to small businesses, but are unfortunately complex (much more so than they should be).
One of the tests in the law that a taxpayer needs to meet is what is called the maximum net asset value test. This test is whether in the year in question, the concession can be claimed if the value of its net assets did not exceed $5 million. It sounds straightforward, but it isn’t. Under the test, the net value of CGT assets of entities “connected with” the taxpayer is required to be taken into account for purposes of maximum net asset value test. It is the meaning of “connected with” that recently brought a taxpayer undone before the Federal Court.
The taxpayer was a company that made a capital gain of just over $1 million in selling its 50% interest in a car wash business in the 2007-08 income year. It did not return the gain as assessable income but instead claimed that it was entitled to apply the CGT small business concessions. The company claimed that in calculating its taxable amount, it was entitled to rely on a statutory concession in the tax law on the basis that the value of its CGT assets did not exceed $5 million.
However, the Tax Commissioner issued an amended assessment to include the gain on the basis that the taxpayer failed the (then) $5 million MNAV test. At first instance, the Administrative Appeals Tribunal had to decide whether sole director and controller of the company (Mr Roberts), could exclude from the MNAV his interest in a Queensland property, which had been rented for much of the previous seven years, but which at the time of the sale of the carwash had been taken off the rental market and had intended to be once again used as his and his wife's holiday home.
Also at issue was whether the wife's CGT assets, including her interest in the Queensland property, were to be taken into account on the basis of her being either a connected entity and/or a "CGT small business affiliate" of the taxpayer company.
In its decision, the AAT dismissed the argument that the 50% interest of the husband in the Queensland property should be disregarded. However, it held that the wife's CGT assets, including her 50% interest in the holiday home, were not to be counted in applying the MNAV test because she was not connected with the taxpayer company as she did not own any shares in it. It then found that although she was a "CGT small business affiliate" of the controller of the taxpayer company (her husband) by virtue of being his wife, she was not a CGT small business affiliate of the taxpayer company as required by the relevant law in order for her CGT assets to be included. The Tax Commissioner appealed.
The Commissioner argued that in applying the relevant provision, the tribunal ought to have included, but did not include, the value of the assets of Mrs Roberts in the calculation of the value of the company’s assets before the sale of the car wash.
The Commissioner contended that the tribunal erroneously limited its enquiry into whether Mrs Roberts herself beneficially owned shares in the company that carried the right to control the exercise of at least 40% of the voting power, whereas the tribunal ought to have considered whether Mrs Roberts’ small business CGT affiliate (her husband) owned shares in the company that carried between them the right to control the exercise of at least 40% of the voting power.
The Federal Court said the covering words in the relevant provisions of the tax law contemplated three bases upon which to determine the relevant connection between the company and another entity (in this case the wife). The court said the tribunal concluded that the relevant provision did not apply because the wife was not connected with the company although her husband was.
The tribunal did not, however, consider (but should have) whether the wife was deemed to be connected with the company by the same law which required that her connection be determined also by reference to her small business CGT affiliate (in this case, her husband) or together with her small business CGT affiliate (in this case, together with her husband).
The case highlights the inherent complexities in what should really be a relatively straightforward tax concession.
The small business CGT concessions are valuable to any SME and can result in significant tax savings. However, any SME contemplating claiming the concessions would be very well advised to seek professional advice. This is one piece of tax law that is crying out for simplification.
Terry Hayes is the editor-in-chief of tax news reporting at <a href="https://www.thomsonreuters.com.au/" target="_blank">Thomson Reuters</a>, a leading Australian provider of tax, accounting and legal information solutions.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
</body></html>

Beneficial but tricky capital gains tax concessions explained

<html><body>
GUEST OBSERVATION
Our federal budget is due to be delivered on Tuesday 13 May, 2014 and we are being repeatedly told that there has to be significant cuts to expenditure. Our state budgets will be delivered soon after that date.
In essence it is time for governments to deliver something which is new and helpful to maintain and increase housing stock, but at the same time does not simply drive housing prices higher. This definitely rules out changes to negative gearing as its removal would simply reduce investor activity and available housing stock.
There are two outcomes in our housing markets that are needed:
1. Ensure there is an increase in Australian citizen investment in new housing stock; and
2. Increase the number of first home owners in the market.
The first, in my view, is a state issue
Most of us will have family or friends who have been trying to buy a home and failed because they have been out bid by a cashed-up foreign buyer. One has to ask whether foreign buyers should have equal rights as Australian citizens. I suspect not. That is not to say that foreign buyers are not necessary in our markets, rather they are simply investing in a low risk, very attractive country and for that benefit they should have to pay some type of premium.
Altering our land tax regime would enable us to charge this premium from foreign investors and potentially decrease their activity without necessarily decreasing supply of new stock. This can be done by increasing the land tax payable by non-Australian citizens who own property in our country and at the same time, decrease the rate of land tax charged on property owned by Australian citizens, with all property purchased in the future and currently held, being subjected to these changes. Obviously, the amount of these alterations will need to be modelled and the changes would need to be phased in.
The consequence is clear. Foreign investment activity would be marginally reduced (depending on the altered tax rate applicable to them) and the lower tax rates for Australian citizens should cause increased investment activity by this group. It should also mean that the first home owner may have a better chance of competing when buying.
The second, in my view, is a federal government matter
The first home owner has been forced out of the market simply as a consequence of rising house prices and the consequent level of income needed to support a home loan.
In essence we need to organise things so this group – and everyone buying a property to live in – has adequate cash flow to meet the high home loan repayments. This will particularly be the case when interest rates increase in the medium term.
A relatively simple change to the capital gains tax (CGT) legislation is required.
This change would allow home owners to claim interest deductions on their home loan repayments where they elect to be subject to normal capital gains tax on the profit they make on any future sale of the property. In essence they exchange the right to have their home exempt from capital gains tax in exchange for the right to immediately reduce their taxable income by the interest they are paying on their home loan.
Being brutally honest given the government’s current budget problems they should simply just phase in the removal of the capital gains tax exemption on the family home all together and automatically provide first home owners who buy a new home with the right to claim interest deductions. Politically this might be better for government than altering pension rights and health benefits etc.
Allowing buyers to elect to claim interest as a deduction would mean an improved annual cash flow which will help to make housing more affordable. What is the cash benefit? Well assume someone has a loan of $400,000 and has a tax rate of 22% then the annual benefit at current interest rates would be in the order of $5,000 per annum or roughly about $100 per week.
The impact of this proposal on borrowers as interest rates increase should also not be overlooked. That is, deductibility means that interest rate increases will not have as large a negative impact on our first home owner as they would otherwise. As interest rates increase their deductions increase and their tax liability is reduced. Hence as interest rates rise, defaults on home loans are likely to also be lower.
There needs to be some detailed modelling to work out a progressive phasing in and potentially define a percentage of the interest cost on the home loan that would be allowed to be deductible. Once this is done then a reasonably solid estimate of the cost to the federal budget could be identified.
From any logical perspective, a combination of subjecting all of our owner occupied housing to a form of capital gains tax and allowing our first home owners to access interest tax deductions, does have merit. And provided it is structured in a manner which does not drive housing prices higher, it will also make housing affordable for the next generation.
The negative which could be seen as a benefit by some, is that it would encourage home owners to limit their trading activity in their own home. That is, a home owner would potentially be less inclined to use their home as trading stock and instead use it as a mechanism for wealth generation by buying with the intent of selling following renovation.
In the short-term we are going to be asked to accept some difficult decisions and perhaps the above, implemented carefully by government could potentially soften the perceived blow.
John Edwards is consulting analyst for <a href="https://www.onthehouse.com.au/" target="_blank" rel="nofollow">Onthehouse.com.au</a> and founder of <a href="https://www.residex.com.au/" target="_blank" rel="nofollow">Residex</a>.
</body></html>

jedwards-8kHM8GNY6d

Two brave budget decisions that would benefit tomorrow’s generation

<html><body>
Hi Margaret,
Just a query on capital gains tax (CGT).
Our principle place of residence is currently on the market to sell, and once it does we would like to buy another property.
However the kind of property we would like to buy next as a primary residence is at this point out of our price range.
What we would like to do is climb the property ladder by doing a quick reno then selling.
Is there a required time frame for us to live in this property to be exempt from CGT?
Regards, 
Grace
Margaret's answer on the next page. Please click below.
 
<hr class="system-pagebreak">
Hi Grace,
As long as you live in a property and do not claim another property as your principal place of residence (PPOR) during that time, then there is no set period of time in which you must live in a property in  order to avoid capital gains tax (CGT). 
The CGT exemption applies to any residential property in which we live and claim the principal place of residence upon. The requirements to claim this exemption are that you live in the property and it is your primary place of residence, and that you have no other primary place of residence.
If you kept buying properties, lived in them and did a renovation, and then sold them quickly, doing it again and again in short periods of time, you may place yourself in the situation where the tax office would consider that you are in fact in the business of property renovation and may disallow the exemption. Under such circumstances it is more likely that they would also see the gains you made as income and tax you accordingly, rather than apply capital gains tax.
If you are genuinely moving in in order to climb the property ladder for your personal circumstances only, rather than looking to make more and more profit from renovations and using the PPOR exemption rule simply to avoid tax, then it won't matter how long you live there, the exemption should apply.
Kind regards, 
Margaret
Have a property question?  <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
</body></html>

Moving up the property ladder via renovating and selling: But do I need to pay capital gains tax?

<html><body>
Capital gain, or the amount you manage to sell the property for, minus what you paid for it, is a taxable income.
The tax you pay on this extra earning is referred to as capital gains tax, or CGT, and is part of your income tax and must be declared on your tax return.
CGT was brought in on 20 September 1985, and anything purchased since this time is subject to the tax, unless they’re specifically excluded. Specific exclusions include your home and car, and most of your personal use assets, according to the ATO. This includes items such as furniture.
“CGT also doesn’t apply to depreciating assets used solely for taxable purposes, such as business equipment or fittings in a rental property,” they explain.
However, shares, real estate and other assets and investments are the most common things hit up for tax.
The family home
If you move out of the home, for up to six years, you may still find yourself exempt from capital gains tax. If you rent out a room in your PPOR, you may find yourself up for a portion of the tax.
If you haven’t owned the property for a whole year, then there is another outcome. <a href="/expert-insights/finance/do-i-have-to-pay-capital-gains-tax-on-land-i-havent-owned-for-a-year-ask-margaret">Margaret Lomas explains to one investor what tax they’ll be incurring</a> in this Q&amp;A article. 
Keeping records
You must keep records proving the acquisition date (when you bought the property), and how much you purchased it for. You should also keep records about the sale, and when it became transferred into another person’s name. Be aware of lurking too close to the end of financial year – you may find that this changes your plans to minimise CGT.
Speak to your accountant before selling any asset. This is important, as often it is the date on the contract, not settlement date, which can be some months later, that the ATO will look at.
Read<a href="/expert-insights/finance/nine-tax-tips-for-property-investors"> these nine tax tips, from Ken Raiss</a>, for more information on preparing yourself for tax time. 
How much will you have to pay?
There are three ways to work out CGT – the indexation method, the discount method and the ‘other’ method. These three methods apply in different situations, as <a href="https://www.ato.gov.au/General/Capital-gains-tax/In-detail/Guides/Guide-to-capital-gains-tax-2012-13/?anchor=Capital_gains_calculation_methods#Capital_gains_calculation_methods" target="_blank">outlined by the ATO</a>. Property and shares held for more than 12 months are entitled to a 50% CGT discount.
A capital loss, or the amount that you perhaps lose on a property compared to what you purchased it for, can offset a capital gain and reduce tax. Savvy accountants may suggest that you sell a loss-making asset in the same year as one of your best growing properties, if you’re looking to offload both, to help bring down the tax you pay. Capital losses can be carried forward, but not backward.
If you’re looking to work out how much capital gains tax you have payable, then we have a free calculator online (that doesn’t keep your details) that will quickly calculate what you will need to give to the government.
The length of ownership can heavily affect CGT. Guest observer <a href="/expert-insights/finance/understanding-capital-gains-tax-terry-hayes">Terry Hayes describes more about understanding CGT in this article</a>.
Incorrectly stating or <a href="/expert-insights/finance/landlords-should-take-care-not-to-get-caught-out-by-the-taxman">wrongly outlining your capital gains and related information to the ATO could land you in severely hot water</a>, so it's worth having an accountant give your information a good look.
</body></html>

Capital Gains Tax

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Capital Gains Tax

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News