Capital Gains Tax Advice Please?

[JASA]

I am sure this question has been asked before but have tried searching the forum without any luck.

My Father recently died and I am considering buying my parents property 1) to allow Mum to move into a low maintenence home 2) because I can buy it for a good price and 3) because I think it will have good capital growth over the next 5 years.

I plan to live in it for a short time then rent it out and rent myself in a more convenient location. How long would I need to reside in it as a PPOR before moving out to avoid CGT when I sell? Is there a specific time ? does it vary from state to state? I am in SA

Thanks in advance.

 

[Terry_w]

I am sure this question has been asked before but have tried searching the forum without any luck.

My Father recently died and I am considering buying my parents property 1) to allow Mum to move into a low maintenence home 2) because I can buy it for a good price and 3) because I think it will have good capital growth over the next 5 years.

I plan to live in it for a short time then rent it out and rent myself in a more convenient location. How long would I need to reside in it as a PPOR before moving out to avoid CGT when I sell? Is there a specific time ? does it vary from state to state? I am in SA

Thanks in advance.

Sorry to hear about your Father.

Has the estate been wound up? Is there a will?

If you purchase from your mum you are likely to be up for stamp duty and CGT at market rates.

If you inherit the property there would be neither, but there could be CGT later depending on a few things.

I think you should probably seek specific legal advice

 

[JASA]

Thanks for your reply and condolences Terry. Yes there was a will leaving everything to Mum. I expect to pay market price (which is very low at the moment) and stamp duty at on transfer of title. What I am trying to avoid is CGT when I eventually sell it on. I have other investment properties but currently do not have any nominated PPOR. I have been living in the property with Mum. I know I have a six year period to sell without attracting CGT but how long do I need to reside there initially before letting it out?

 

[Terry_w]

Thanks for your reply and condolences Terry. Yes there was a will leaving everything to Mum. I expect to pay market price (which is very low at the moment) and stamp duty at on transfer of title. What I am trying to avoid is CGT when I eventually sell it on. I have other investment properties but currently do not have any nominated PPOR. I have been living in the property with Mum. I know I have a six year period to sell without attracting CGT but how long do I need to reside there initially before letting it out?

The relevant legislation doesn't have any time restrictions. As long as you make it your main residence you would technically comply.

You may be able to do some things with the estate to save on stamp duty on the transfer from your mum. There are a few strategies which could possibly be implemented - if the estate hasn't been wound up yet.

 

[JASA]

Hi Terry, No the estate hasn't been wound up yet. Not sure how that works?
Good to know there is no time restriction. Mum has found the ideal property near to family and we need to move quickly in order to secure it so we hoping there will be no complications.

 

[Terry_w]

Hi Terry, No the estate hasn't been wound up yet. Not sure how that works?
Good to know there is no time restriction. Mum has found the ideal property near to family and we need to move quickly in order to secure it so we hoping there will be no complications.

Depends on the wording of the wills and succession related laws. Your mum may be able to renounce her gift of the property for example. This could (long shot) result in you obtaining the gift instead.

best to speak to a wills and estates lawyer.

 

[JASA]

Thanks Terry W . I spoke with a lawyer today.

 

[Terry_w]

Thanks Terry W . I spoke with a lawyer today.

Anything come out of it?

 

[JASA]

Yes I was given some creative options but it was complicated and would be expensive to set up....so just going to cop the stamp duty...it's all too hard. I am paying just over council valuation for the property so not a bad deal.