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_Steve1231(Newbie)Newbie
9 June 2021

My sister bought an apartiment in 2010 and it has a cost base of $450k. Currently it’s market value is $550k. Since having moved overseas longterm, she would like to gift/transfer the property to me for a nominal price of $5. If I decide to sell the property in 10 years time as an investment, is my CGT then calculated based on the market value at the time of the transfer (eg $550k plus any other expenses for cost base) rather than the $5 I paid for it as the gift? I understand she has to pay CGT on the $100k ($550-$450k) at the time of transfer and I have to pay the stamp duty (based on $550k) for transferring the title. Thanks! ps. are there any other tax implications I should be aware of for the above scenario? @BlakeATO @Jodie_ATO

7,062 views
1 replies
7,062 views
1 replies

Most helpful response

Most helpful replyATO Certified Response

_KaraBATO(Community Support)Community Support
ATO Certified Response11 June 2021

Hello @ Steve1231

Yes, you are correct.

When transferring real estate to family, both you and your family member will calculate your capital gains using the market value at the time the property was gifted.

This is called the market value substitution rule: If your capital proceeds are more or less than the market value of the CGT asset, you are taken to have received the market value of the asset at the time of the CGT event.

Information you and your sister may find useful on our website includes:

    • Market valuation for tax purposes
    • Working out your capital gain or loss
    • Selling your rental property

    All replies

    Most helpful replyATO Certified Response

    _KaraBATO(Community Support)Community Support
    ATO Certified Response11 June 2021

    Hello @ Steve1231

    Yes, you are correct.

    When transferring real estate to family, both you and your family member will calculate your capital gains using the market value at the time the property was gifted.

    This is called the market value substitution rule: If your capital proceeds are more or less than the market value of the CGT asset, you are taken to have received the market value of the asset at the time of the CGT event.

    Information you and your sister may find useful on our website includes:

      • Market valuation for tax purposes
      • Working out your capital gain or loss
      • Selling your rental property

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