Can someone please clarify if I have understood correctly the CGT implications of an investment property sale below market value.
Say someone buys a property with a market value of $1,000,000 for $500,000.
The person who sells it to me has to pay CGT based on the market value of the property.
The person who buys it, when they one day sell it, will need to pay CGT based on that discounted sale price that they bought it at as the cost base? So if they one day sell it for $1,500,000 they will have $1,000,000 as assessable income before the 50% discount.
If I have understood this correctly is the property not being hit twice with CGT. Why is the seller paying CGT at market value when the person who buys it from them will have to one day use the actual value of the purchase as their cost base?
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