CGT cost base question

[james.patre]

CGT cost base reset - section 118-192?

Hi folks,

Say I have a PPR but I 'did not move in as soon as practicable', say I waited a month before moving in from my rental. So I would say I don't have 'full exemption'.

In 5 years I move out of that PPR and then rent it out. Will the CGT cost base reset to market value as per section 118-192?

(http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.192.html)

Or does it not apply because I don't have full exemption when it is rented out?

 

[james.patre]

Hi folks - would appreciate your thoughts on this. Thank you in advance.

 

[jrc]

Hi folks,

Say I have a PPR but I 'did not move in as soon as practicable', say I waited a month before moving in from my rental. So I would say I don't have 'full exemption'.

In 5 years I move out of that PPR and then rent it out. Will the CGT cost base reset to market value as per section 118-192?

(http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.192.html)

Or does it not apply because I don't have full exemption when it is rented out?

Section 118-192 does not apply. However, you should be able to include in your cost base rates, interest etc that you have not been able to claim as a tax deduction even during the period you are residing in it

 

[james.patre]

Ok - so I assume that's because I did not 'move in as soon as practicable'.

What happened is that I spent probably 2 weeks renovating the house before I moved in since it was in pretty bad condition (broken windows, broken doors etc). I was renting an apartment while that happened. I had electricity etc already under my name from the start.

Does that count as 'moving in as soon as practicable'?

 

[Scott No Mates]

Did you have another PPOR or only living in the rental? If this is your only property, for all intents and purposes you could prove that you moved in (power/water is in your name, address on bills/licence etc).

Is this for FHBG or Just CGT issues?

 

[james.patre]

No other property, this was our joint first. This is mostly about CGT and the base cost reset, since in the future we might subdivide into 2-3 rentals. which may then be sold.

 

[Scott No Mates]

From the ATO

Q) How much would you think that your property increased between settlement and when you moved in?

A) Nothing noticeable.