How do I figure out how much I owe in capital gains?
Suppose you are liable to pay capital gains tax on the sale of your property. In that case, the amount you have to front up at tax time is calculated by deducting the price you paid for it when you signed the contract from the total sale price, minus any fees.
So if you bought a property for $450,000 and sold it for $500,000, the capital gains amount owing would be $50,000, minus fees related to the sale.
Those fees might include stamp duty, cost of the transfer, advertising, or professional fees, including conveyancers, brokers and accountants.
It’s also worth noting that a capital gain could push taxpayers into a higher tax bracket.
Of course, you can also record a capital loss if you sell the property for less than you bought it. But you can’t deduct a capital loss from your overall tax time income. If you make a separate capital loss, on say on shares, you might be able to capital gains owing. There are options to defer a capital loss to deduct it from any future capital gains.