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I live in Australia. What are the tax incentives to spending money on my home?

• skissane 7y ago
  roenxi is possibly talking about the main residence CGT exemption.
• roenxi 7y ago
  When you spend money on your house the value of that house increases. When you sell your primary residence, it isn't caught by the Capital Gains Tax. So essentially if you are looking for a place to park money you have two choices: 1) Put it in your primary residence. Wealth is stored, no future tax liability, you are more comfortable 2) Buy a productive asset. Wealth stored, you will pay capital gains tax on the asset price rises due to asset inflation. The most tax-effective place to store money long term is capital improvements to your primary residence, mainly due to how inflation and CGT interact. And the capital value of the property could reasonably rise more than the cost of the work done. There are risks but there is also a lot of incentive to remodel the kitchen or upgrade something if money is available.
  • TheSpiceIsLife 7y ago
    Thanks for clearing that up.