Statutory loss is a term used to describe the loss that is made from the sale of a property that has been held for more than 12 months. The statutory loss is calculated by subtracting the sale price of the property from the purchase price of the property.
The statutory loss is not subject to capital gains tax (CGT). However, it can be used to offset capital gains made on other properties.
Here are some examples of how statutory loss can be used in Australian English in the context of property research:
- A property investor might be able to use a statutory loss from the sale of one property to offset a capital gain from the sale of another property.
- A property developer might be able to use a statutory loss from the sale of a development site to offset capital gains made on other properties.
- A homeowner might be able to use a statutory loss from the sale of their principal residence to offset capital gains made on other properties.
Statutory loss is an important concept to understand in the context of property research. By understanding how statutory loss works, investors can make informed decisions about their investments and to ensure that they are compliant with the law.
Here are some additional terms that you might come across in the context of statutory loss:
- Capital gains tax (CGT): A tax that is payable on the profit that is made from the sale of certain assets, such as property.
- Capital gains tax offset: An offset that is available to taxpayers who have made capital losses.
- Marginal tax rate: The tax rate that is applied to the highest marginal income band.