QUESTION 5

Joe lived at 14 Hope Street at Parkview on the Gold Coast. He signed the contract to purchase the $510,000 0.1-hectare property on 22 March 2010. Joe and his family moved into the property on the date that the ownership transferred to him, which was 23 April 2010. In relation to the purchase of the property, he paid $18,000 in stamp duty and $2,000 in legal fees.

In October 2016, he decided that he and his family might enjoy a change. So, he leased a house at Broadbeach, which he and his family moved into, and then he rented out his Parkview property to tenants. 

Joe later placed the Parkview property on the market and sold his Parkview property for $785,000 under a contract dated 26 June 2020. In relation to the sale, he paid a $15,800 commission to the real estate agent and $2,300 in legal fees to his lawyer. The ownership transferred on 28 July 2020.

Note that Joe does not own any other properties. 

Referring to the four questions that form the 1st step of the 3 step CGT process to calculate a taxpayer’s net capital gain, identify whether or not Joe will make a capital gain or loss from the disposal of the Parkview property.