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From: Anonymous
Hi All,
I have spent some time trawling through the ATO site to try and find the answers to the attached questions, but drew a blank (lots of great info. on PPOR, CGT and negative gearing, but no combined info!).
1. I understand that having lived in it first, you can rent out your 'Principal Place of Residence' for no more than 6 out of ten years without compromising the 'Main Residence Status' and thus avoid CGT upon selling. However, does anyone know whether you can still claim CGT exemption if you avail of the normal NG tax benefits, eg: building/fittings depreciation, during the rental period?
2. If you purchase a property, live in it for a number of years, renovate it extensively and then rent it out, as follows:
1995 Purchase property for $211k (incl. purchase costs)
1998-2002 Spend $320k extensively renovating property (market value now $650k)
2002-2007 Rent out property (deduct depreciation of $27k ? buildings and $26k fittings)
2007 Sell property for $745k (net of selling costs)
If the above property was subject to CGT upon selling, would the 'Cost of Acquisition' be deemed to be $211k or $531k ($211k + $320k)?
3. Using the details in 2. above, if the Cost of Acquisition is deemed to be $531k, the mortgage is $400k, i.e. personal funds were used to pay for some of the works, and the mortgage is increased to $531k prior to renting, will interest relief be allowed on $400k or $531k?
Any insight, as always appreciated
Regards.
Fiona
P.S. Does anyone know how you can post using your forum name without your email address being displayed (and thus being a target for even more SPAM!)
Hi All,
I have spent some time trawling through the ATO site to try and find the answers to the attached questions, but drew a blank (lots of great info. on PPOR, CGT and negative gearing, but no combined info!).
1. I understand that having lived in it first, you can rent out your 'Principal Place of Residence' for no more than 6 out of ten years without compromising the 'Main Residence Status' and thus avoid CGT upon selling. However, does anyone know whether you can still claim CGT exemption if you avail of the normal NG tax benefits, eg: building/fittings depreciation, during the rental period?
2. If you purchase a property, live in it for a number of years, renovate it extensively and then rent it out, as follows:
1995 Purchase property for $211k (incl. purchase costs)
1998-2002 Spend $320k extensively renovating property (market value now $650k)
2002-2007 Rent out property (deduct depreciation of $27k ? buildings and $26k fittings)
2007 Sell property for $745k (net of selling costs)
If the above property was subject to CGT upon selling, would the 'Cost of Acquisition' be deemed to be $211k or $531k ($211k + $320k)?
3. Using the details in 2. above, if the Cost of Acquisition is deemed to be $531k, the mortgage is $400k, i.e. personal funds were used to pay for some of the works, and the mortgage is increased to $531k prior to renting, will interest relief be allowed on $400k or $531k?
Any insight, as always appreciated
Regards.
Fiona
P.S. Does anyone know how you can post using your forum name without your email address being displayed (and thus being a target for even more SPAM!)
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