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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 for the transfer/gift process she has to pay CGT on the $100k ($550-$450k) 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?

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824 views
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Most helpful replyATO Certified Response

BlakeATO(Community Support)Community Support
ATO Certified Response10 June 2021

Hi @Steve1231

You're right about the value of the property for CGT.

If you don't deal with the seller at arm's length, you need to use the market value substitution rule.

This means that instead of the actual cost ($5) as your first element, you use the market value ($550k).

Stamp duty is a state-imposed tax, so you'll need to check with your state government for that bit.

You can read about the market value substitution rule on our website.

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Most helpful replyATO Certified Response

BlakeATO(Community Support)Community Support
ATO Certified Response10 June 2021

Hi @Steve1231

You're right about the value of the property for CGT.

If you don't deal with the seller at arm's length, you need to use the market value substitution rule.

This means that instead of the actual cost ($5) as your first element, you use the market value ($550k).

Stamp duty is a state-imposed tax, so you'll need to check with your state government for that bit.

You can read about the market value substitution rule on our website.

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CGT payable when selling an investment property that was a gift/transfer | ATO Community