Cgt?

[stevec]

Hi all,

Need some clarification. Bought an IP OTP in 2001. Will settle next week. My thoughts are:

Keep it and rent it out, or

Can I sell it now and not be liable for CGT?, as long as I don't rent it out. My excuse to the ATO would be that my intention was that when I bought it I was going to move out of my parents place and use it as my PPOR, but since then my situation has changed and I will stay with my parents, as I could not afford it?

Or do I have to move into it "in the eyes of the ATO" for 3 months and then can I "move out" and rent it out and be exempt from CGT for 6 yrs?

Hope this makes sense. Your comments would be appreciated.

Stevec.

[DaleGG]

Hi Steve

You must actually move in to the property as soon after settlement as is possible for it to be exempt from CGT. Sorry.


Dale

Hi all,

Need some clarification. Bought an IP OTP in 2001. Will settle next week. My thoughts are:

Keep it and rent it out, or

Can I sell it now and not be liable for CGT?, as long as I don't rent it out. My excuse to the ATO would be that my intention was that when I bought it I was going to move out of my parents place and use it as my PPOR, but since then my situation has changed and I will stay with my parents, as I could not afford it?

Or do I have to move into it "in the eyes of the ATO" for 3 months and then can I "move out" and rent it out and be exempt from CGT for 6 yrs?

Hope this makes sense. Your comments would be appreciated.

Stevec.

[stevec]

Dale,

Thanks for the reply.

Do I physically have to move in, or can I just change my electoral role details to the new address?

Is that 3 month rule right? Stay there for 3 months, then can I rent it out and be exempt for 6yrs from CGT?

Thanks,

Stevec.

[Mry]

There is no 3 month rule. As long as it becomes a place of residence for you, it becomes a PPOR. I recall a case where a woman moved into a house for less than 2 weeks and it became a PPOR for her at that time.

Of course the length of time is an indicator, but not the whole story. The facts are more important. It requires a physical move, not just an address change on the electoral roll. If you move in, connect the phone, the electricity, change your mail address for work and all other correspondence, you sleep there, the phone bill shows calls and electricity shows usage, who cannot say that it is not your PPOR? If you just move some furniture in there, no phone or electricity, and you sleep somewhere else, thats not a PPOR.

Also, it is an exemption, but with conditions. If you buy another house and move in there, the 6 years ends. But living in your parent's house won't count as living in a PPOR which would void the exemption. If you can last living at your parents that long.