Hi, I'm pretty new here but not really new to property investing..however I have a few questions I'm not very clean on and hoping to get some information..
a) I know of the rule where if you first lived in a property, then you can have it rented out for up to 6 years and if you move back in, that period becomes exempt from capital gains. I assume that if you then purchased another PPOR and moved into that, the capital gains when you eventually sell the first property is apportioned for the period of time the property was not the PPOR and divided by 50% (owned more than 12mths). Eg. lived in for 6 months, rented out for 2 years, lived in another 6 months, got another PPOR for 12 months, therefore property is owned for 4 years in total, 3 of which CGT is exempt. So if the profit was $200k, then 50% is $100k and then CGT is only applicable to $25k as it was an IP for 25% of the time it was owned. If anyone is still following me, is this a correct assumption? Someone else told me this will only work if you sell the property, otherwise you cannot use the exemption?
b) Further to this, I'm getting married late next year, both my fiancé and myself have properties that we have previously lived in as PPOR and are hoping to move back in at some point so we can claim the exemption above (we are currently renting). However once we become married, I was told we will only be able to have one PPOR between the two of us. Does that mean we will automatically lose the ability to claim the exemption (in the future) on one of the properties as soon as we are married? Is there any other way to prevent this? Alternatively if we are looking at getting a PPOR together after we are married, will we need to move back into each of the properties first before the wedding?
c) Along those lines, is there a minimum period we need to live in the properties the second time to complete the CGT exemption?
Apologies for the long post, I would appreciate any information/advice/thoughts!
a) I know of the rule where if you first lived in a property, then you can have it rented out for up to 6 years and if you move back in, that period becomes exempt from capital gains. I assume that if you then purchased another PPOR and moved into that, the capital gains when you eventually sell the first property is apportioned for the period of time the property was not the PPOR and divided by 50% (owned more than 12mths). Eg. lived in for 6 months, rented out for 2 years, lived in another 6 months, got another PPOR for 12 months, therefore property is owned for 4 years in total, 3 of which CGT is exempt. So if the profit was $200k, then 50% is $100k and then CGT is only applicable to $25k as it was an IP for 25% of the time it was owned. If anyone is still following me, is this a correct assumption? Someone else told me this will only work if you sell the property, otherwise you cannot use the exemption?
b) Further to this, I'm getting married late next year, both my fiancé and myself have properties that we have previously lived in as PPOR and are hoping to move back in at some point so we can claim the exemption above (we are currently renting). However once we become married, I was told we will only be able to have one PPOR between the two of us. Does that mean we will automatically lose the ability to claim the exemption (in the future) on one of the properties as soon as we are married? Is there any other way to prevent this? Alternatively if we are looking at getting a PPOR together after we are married, will we need to move back into each of the properties first before the wedding?
c) Along those lines, is there a minimum period we need to live in the properties the second time to complete the CGT exemption?
Apologies for the long post, I would appreciate any information/advice/thoughts!
