CGT on ppor that's is also IP

[Gatoblanco]

I was renting rooms in my principal place of residence and I was classing two thirds of the property as a negatively geared IP and deducting that net loss from my taxable income.
I now no longer do that and just live here myself.
If I sell my house will it be subject to capital gains tax on two thirds of the capital gains (gains made in the time 2/3s was an IP). Or does me living in it now as a purely principal place of residence reset that?
Thank you

 

[Gill Bates]

If you had the house for 10 years and you rented out 2/3 for 5 years and you lived their by yourself for another 5 years

When you living there as your principle residence you get cap gain exception.

for the other 5 years

Tax to Pay = (Gross Profit over 10 years) x ( 0.5 x 0.66 ) x 0.5 x YouMarginalTaxRate


(I'v always wondered if .... no cap gain during the 5 years , you shared house and you had registered valuations for this ...... it would seem you would / should get greater exception )

 

[Gatoblanco]

Thank you Gill Bates. That's the issue I have. I have done renovations recently and when i was renting it out it was through the gfc. Increases in value were close to 0 for a long time.
So it didn't go up much when I rented it out and that would be an issue I would have if I sold it. I would be paying CGT based on increases that occurred later.

 

[Terry_w]

It is complex to work out but don't forget you will be able to use any expense you have incurred but not otherwise claimed to reduce the CGT. This includes interest while owner occupied.

 

[Gatoblanco]

This includes interest while owner occupied.

I claimed 2/3s of the interest as an expense. Can I claim the other 1/3?

 

[Terry_w]

I claimed 2/3s of the interest as an expense. Can I claim the other 1/3?

Yes, and all the other costs.

 

[Gatoblanco]

i would have thought it would have only been 2 thirds of the costs because i need a rented out two thirds of the house

 

[Terry_w]

i would have thought it would have only been 2 thirds of the costs because i need a rented out two thirds of the house

You would have already claimed 2/3s of the costs? If so you cannot use these costs to reduce the cost base.

For the other costs see s110-25(4) ITAA97