CGT and PPOR

[belleran]

Somehow I have lost my previous post so apologies if this comes up as a repeat content.

How long do you have to live in your PPOR before you can sell it and avoid CGT. A friend builds, lives in the property for a short time and then sells avoiding CGT. Her accountant says you no longer have to wait 12 mths from contract date and that it can be as short as 2 weeks as long as you live in it at some point.
Can someone confirm this?

Also which is the best structure for this style of investing? In the name of the highest earner or jointly or other?

 

[Rob G.]

Somehow I have lost my previous post so apologies if this comes up as a repeat content.

How long do you have to live in your PPOR before you can sell it and avoid CGT. A friend builds, lives in the property for a short time and then sells avoiding CGT. Her accountant says you no longer have to wait 12 mths from contract date and that it can be as short as 2 weeks as long as you live in it at some point.
Can someone confirm this?

Also which is the best structure for this style of investing? In the name of the highest earner or jointly or other?

It must be actually or deemed your main residence AND you did not purchase/build with intention to resell at a profit as part of an income exercise.

i.e. Purchase land with intention to live in, build and occupy as main residence within 4 years, it will be deemed your main residence for those 4 years and exempt from CGT.

Only occupying for a short 2 weeks may not be enough to establish as your main residence, this depends on facts such as utilities connection, where the family lives, where posessions are stored, address on electoral role etc.

If you were a developer, a short occupancy will not hide this fact that it is trading stock or similar in an income activity.

If you are not a developer, but cannot establish it as a main residence then the WHOLE TIME it will be subject to CGT.

Cheers,

Rob

 

[belleran]

Thanks Rob,
Since 2002 we have built two duplexes and sold a block of land - all in the name of our family trust. We are not developers - we have paid 50% CGT on each transaction. The PPOR we are intending to build will be in our joint names but we do want the option to sell without any CGT as we see it as a temporary step before we build in our desired location which is yet to be developed. We expect this could be within the first year of our occupation.

Any thoughts on appropriate structure?

 

[FletcherTax]

In practice - most accountants suggest 6 months occupation within your PPOR. (same as per the FHOG)

Fletcher Tax Accountants