Hi, I purchased an investment property off the plan in 2015 and now have to sell it and it has been sold for $50,000 less than I paid. The property was in my name so if we settle on the sale before 30 June is it possible to offset the loss against my personal income for the year?

Hi Will,

Sorry to hear you are selling at a loss - same thing happened to me a few years back.

The loss is a ‘capital loss’ and can only be used to offset capital gains. If you’ve had any capital gains this year you can use the loss. Otherwise the loss will carry forward to future tax years where you can use it to offset a gain in future years.

Regards
James

Hi Will,

James is on the money here. It sux big time but your captial loss is only useful to you if you make a capital gain somewhere.

here are some extra bits of info you will want to bear in mind:
1: the capital loss will carry forward until you make a gain later on...so it is not lost forever in the first year (small comfort I know, but I'm a glass half-full kind a guy)

2: the critical date for you here is CONTRACT date not SETTLEMENT date. The CGT event takes place when you sign the contract, not when the cash is paid.

good luck
bc