Is capital gains tax payable on property owned for 20 years?

MY father owns a rural zoned property that is 17ha in size. He has owned and occupied the property for 20 years now.

When selling, is there any capital gains tax applicable bearing in mind the length of time he has lived on the property?

If the property was acquired prior to September 1985 when capital gains tax was introduced, there will be no CGT on sale.

However if it was acquired since 1985, the house and up to 2 hectares of adjacent land will be exempt but there could be CGT on the balance of the land. If he has been using the land for income- producing purposes there may be other concessions.

This is a complex area and he should seek advice from his accountant before he contemplates any sale. AS a regular reader of your column I note that when you give an example of how we older citizens should arrange our affairs, especially about selling our houses to move to retirement villages etc., your examples are always about properties worth $500,000 – $700,00.

Not all of us have properties worth such vast sums. Like many rural towns throughout Queensland, the average value of a house here is $250,000. My property, a threebedroom, three-bathroom townhouse is only worth $275,000, if I am lucky. How do we, pensioners, make the move to a retirement village? Can you suggest some strategies?

Aged care guru Rachel Lane points out that the values of retirement village units are normally in line with local house prices, so if the average house where you live is $275,000 then a unit in the local village is probably around $230,000 – $250,000.

If this is not the case and units in the village are more than the value of the house, it’s important to be aware that you can negotiate your contract with the village – generally speaking if you pay less upfront you pay more at the end. I AM still confused about whether it is possible for a person with more than $1.6 million in pension mode to make further nonconcessional contributions next financial year.

Given that the limit on nonconcessional contributions will be $100,000 from July, what is the cap for a person whose balance is just under $1.6 million. Can they make the full $100,000 contribution or is it just the difference between $1.6 million and their current balance.

The way the regulations are drafted means that a person cannot make non-concessional contributions if their balance was $1.6 million or over on June 30 in any year. Therefore, if your balance in pension mode was $1.595 million on June 30 2017, and you are not prohibited from making contributions due to your age, you would be allowed to make a nonconcessional contribution of $100,000. Noel Whittaker is the author of Making Money Made Simple and other finance books. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. Email: noel@noelwhittaker.com.au