A maximum tax rate of 15% on investment earnings in super and 10% for capital gains. No tax on withdrawals from super for most people over age 60. Tax-free investment earnings when you start a super pension.
In Australia, retirees do pay capital gains tax when selling an investment property. However, retirees are likely to pay less in capital gains tax than pre-retirees, due to assessable capital gains being added together with all other forms of taxable income before tax is calculated at marginal rates.
For most people, this percentage is far below their regular income tax rate and highlights the benefit of asset ownership within superannuation. If you are retired and already drawing your pension income from your super accounts, CGT is not applicable.
You won't have an assessable capital gain when you sell a business asset if: your business has owned the asset for at least 15 continuous years. you're aged 55 years or over. you're retiring or permanently incapacitated.
A pensioner can earn up to $33,000 before paying tax in Australia, if single, or $30,500 if a member of a couple. This is calculated using the tax-free threshold of $18,200, plus being eligible for the Low Income Tax Offset and the Seniors and Pensioners Tax Offset (SAPTO).
To be eligible for an Australian Government age pension from Centrelink, on 30 June 2023 a pensioner must be 66 years and 6 months or older . To be eligible for a pension, allowance or benefit from Veterans' Affairs you must meet the veteran pension age test and on 30 June 2023 be 60 years old or older.
If you use your former home to produce income (for example, you rent it out or make it available for rent), you can choose to treat it as your main residence for up to 6 years after you stop living in it. This is sometimes called the '6-year rule'. You can choose when to stop the period covered by your choice.
An exception to this is the 6 month rule which states that where a taxpayer acquires a new dwelling that is to become their main residence, and the taxpayer still owns their existing main residence, both dwellings can be treated as the taxpayer's main residence for a period of up to 6 months.
Australia's six year absence rule allows you to turn your primary place of residence (PPOR) into an investment property and collect rent and claim depreciation for up to six years provided you've stopped living there. When it comes time to sell you won't be liable for capital gains tax or CGT for those six years.
How to claim the tax-free threshold. You can usually claim the tax-free threshold on the first $18,200 of income you earn in the income year. This is called the tax-free threshold. Your income may be from one or more payers, such as an employer or government agency or work you do under an ABN.
You then need to apply the CGT rate to the capital gain. Say for example, you received a capital gain of $200,000 on a property that you had held onto for over 12 months. Your marginal tax rate is 37% then, your capital gains tax would be $74,000 ($200,000 x 37%).
How long do you have to live in a house to avoid capital gains tax in Australia? To avoid CGT, you'll need to live in a property for twelve months for it to be counted as your main residence before you can move out and use it as an investment property.
Your SMSF's assessable income includes any net capital gains, unless the asset is a segregated current pension asset. Complying SMSFs are entitled to a capital gains tax (CGT) discount of one-third if the relevant asset had been owned for at least 12 months. A net capital gain is: the total capital gain for the year.
Making personal concessional (deductible) contributions to superannuation can effectively reduce capital gains tax within your individual name, because you receive a personal tax deduction for making personal concessional contributions to super, which reduces your assessable income and can also reduce your marginal tax ...
If you're a retiree with retirement income sources other than – or in addition to – a tax-free super pension, you must lodge a tax return.
If you sell or dispose of your capital gains tax assets in less than 12 months you'll pay the full capital gain. But, you (as an individual) could get a 50% discount on your capital gain (after applying capital losses) for any capital gains tax asset held for over 12 months before you sell it.
To satisfy the Australian Tax Office under the six year rule, the residence must have genuinely been a PPOR, or primary place of residence. The dwelling must have been your main residence first, and to qualify for the CGT exemption you must have actually stopped living in it.
If you wish to repurchase an investment that you have recently sold, over 30 days must elapse between the two transactions in order for you to utilise your CGT exemption or create a loss to offset against other gains realised within the same tax year.
183-day test
This test only applies to individuals arriving in Australia. You will be a resident under this test if you're actually present in Australia for more than half the income year, whether continuously or with breaks.
Generally, you can only claim one principal place of residence exemption anywhere in Australia at a time, although there are limited exceptions to this rule.
Sexual consent
New South Wales, Victoria, the Australian Capital Territory and Tasmania have laws that provide a legal defence for having sex with a person under the age of consent if the people are of similar ages. This is known as a close in age defence.
The government will provide $3.7 million in 2023–24 to extend the measure to provide age and veteran pensioners a once-off credit of $4,000 to their Work Bonus income bank and temporarily increase the maximum income bank until 31 December 2023.
The Work Bonus income bank is useful for pensioners who wish to work, particularly those who undertake intermittent or occasional work. Note: from 1 December 2022 to 31 December 2023, a one-off, temporary credit of $4,000 applies to Work Bonus income bank balances.