If a property is used as an IP first, then a PPOR, capital gains are assessed on the increase in value in proportion to the time used for each purpose. Any money spent on repairs while it is an IP have been claimed on tax, so if a valuation was used it would amount to "double dipping" in that claimed repairs and depreciated fittings would be added to the value of the property to raise the cost base.
I guess the reason for using a valuation if the PPOR becomes an IP is that people's intentions change, and over time a lot of improvements may have been done so that the exact cost base is impossible to establish unless every cent spent has been documented, which simply doesn't happen.
Marg
I guess the reason for using a valuation if the PPOR becomes an IP is that people's intentions change, and over time a lot of improvements may have been done so that the exact cost base is impossible to establish unless every cent spent has been documented, which simply doesn't happen.
Marg