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How does the primary residence exclusion work when there is joint ownership?

Posted 23 June 2015 under Tax Questions



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Chris says:
21 May 2015 at 15:38

When a house is owned jointly by two people and they sell it, how does the $1. 5 million primary residence exclusion work? Say the house is worth R3 million when they bought it and they sell it for R6 million -- then how much capital gains tax will they pay?

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TaxTimTaxTim says:
22 May 2015 at 9:53

Each person is entitled to claim the half the exclusion in this case so R1m each as the exclusion is now R2m. Therefore the capital gain will still be R3m - R2m = R1m which is then divided by 2 for each person. Each person then gets an additional annual exclusion amount of R30 000 which means the gain included in their taxable income is R470 000 each.


Chris says:
22 May 2015 at 10:18

Thank you! :-)


TaxTimTaxTim says:
22 May 2015 at 10:29

Only a pleasure!


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