Tax On Sale Of Ppor

[DAYANAND]

Hi everyone,

I would appreciate if some one would advise me on the following;

If i sold my current PPOR for $400,000 and made a $100,000 profit from sale

a) Is there any CGT is payable on the profits.
b)What if i purchased another PPOR for $350,000 and the balance $50,000
is invested in an IP, do we have to pay tax on the $50,000

Daya

[luckyone]

a) No you don't have to pay CGT as it is your PPOR.
b) No you wouldn't have to pay tax on the $50,000.

[Mry]

a - If the PPOR was your PPOR for the entire time you owned it,
b - You never claimed a portion of the house as a home office expense under the occupany method, and
c - You never rented out part of your house to someone else;

then you can sell it tax free.

CGT payables only arise on the disposal of an asset. Granted there are some exceptions, but in your case, there is no tax that would arise on the purchase of an IP. It is purely a money shuffling exercise. It would be like getting taxed on transferring money from your cheque account to your savings account, which is ludicrous.

[Twitch]

b)What if i purchased another PPOR for $350,000 and the balance $50,000
is invested in an IP, do we have to pay tax on the $50,000

Daya

Do NOT use the spare 50k for a deposit in an IP. Use it to reduce your new PPOR debt and borrow the $50k for an IP against your increased equity so the interest is deductable.

[quiggles]

It would be like getting taxed on transferring money from your cheque account to your savings account, which is ludicrous.
I think that's why it's called BAD tax. :mad:

[kierank]

a - If the PPOR was your PPOR for the entire time you owned it,
b - You never claimed a portion of the house as a home office expense under the occupany method, and
c - You never rented out part of your house to someone else;


... and d) the land content is not greater than 2.5 hectares. If it is, you pay CGT on the portion > 2.5 hectares (I believe).

KieranK

[cutegirl]

How about,

1. I rent my PPOR first, for a couple of months, then I live in my PPOR for 6 years, then will I still be eligible for CGT exemption ?

2. During the time when my PPOR is being rent out, I did some repair. My question is whether that repair that I made during that period will be tax deductible ?

Thank's......

[Merovingian]

How about,

1. I rent my PPOR first, for a couple of months, then I live in my PPOR for 6 years, then will I still be eligible for CGT exemption ?

2. During the time when my PPOR is being rent out, I did some repair. My question is whether that repair that I made during that period will be tax deductible ?

Thank's......

I think that as soon as any residential property is tenanted, it is automatically subject to CGT, (even it when it is sold, you're living in it).

I could be mistaken, but I think that's how it works...

Perhaps some confirmation from someone "in the know"? :p :rolleyes:

[Simon]

You can rent your PPOR for up to 6 years and retain the CGT exemption.

As stated before there are a few requirements to bear in mind.

The property must be a home first

You cannot claim another property as a home as well. ie not buy another PPOR (except if you are selling the old one then they can overlap by up to 6 months).

In the case where you rent first, then move in there will be CGT liable for the proportion you rented it before it became your home.

ie if you rent if for a 3 months then live in it for 6 years you will be liable for CGT on 4% of the gain (then halved to 2% due to 12 month rule). ie it was an IP for 4% of the time you owned it.

Hope this helps a little and remember I am no accountant so don't take this as financial advice :o