Q. We are a retired couple of 74 and 78 years old. We have a Commonwealth Superannuation Corporation pension for my husband, and this is made up to an Aged Pension by a part-pension each from Centrelink. We have not had to do a taxation form for a few years now. We own our own home and have had a holiday home for the past 12 years, which was sold in November. It was solely used for us and our extended family and never rented. People have suggested that as we are both retired we do not have to pay any capital gains tax (CGT), while the Australian Taxation Office site suggest otherwise. Could you kindly give us your thoughts on this?
A. The correct answer does not turn on whether you are retired. Provided the property was acquired after August 1991 and has never been rented, all expenses since acquisition can be added to the base cost and accordingly reduce any capital gains tax that might be payable. These include rates land tax insurance, interest, cleaning bills, repairs, and maintenance. Just make sure you liaise with your accountant to ensure that your tax return is done properly.