My wife owned an apartment in China (our primary residence at the time) before we moved to Australia and become Australian residents for tax purposes. About 1.5 years after moving to Australia, she sold the apartment.
I understand that the value of the apartment at the time we moved to Australia and became Australian tax residents would be the cost base used to calculate the gain or loss. And that you should get a professional valuer of some kind (even if they're in China) to value what the apartment was worth when we moved to Australia.
My question is: If it's indisputable that the property declined in value since we came to Australia, does my wife have to declare the capital loss? The property was sold for over $100k less than what it was brought for originally and the Chinese real estate market definitely fell a lot in the time since we moved to australia and when the apartment was sold. We could show plenty of data if required showing average real estate prices were way lower at the time the apartment was sold compared to our date of become tax residents in Australia.
The reason I ask is because it would be a massive pain to try to get any kind of accurate valuation of the apartment and we don't care about having a capital loss that could erase future gains. It would be much more convenient if we didn't have to get a valuation and just ignore it, assuming of course it's indisputable that it would have declined in value since coming to Australia. (Obviously if it would be a GAIN that has to be declared. But does it matter legally if you don't declare a loss?)
525 views
1 replies