CGT Question....again!

[Rooster]

My question is probably a common one, but i cannot as yet find the exact answer.

Question - Purchased a unit in april 2001. Purchased as PPOR, recieved first home owners grant, and lived in property for approx 14 months.

I renovated the property while living there and then in July 2002 I switched the property to an investment loan and started it as a rental property.

My question is.. am i liable for CGT and if possible can someone give me an idea of how to roughly calculate this tax...if any!!

I hope that makes some sort of sense

At your mercy
Rooster...

 

[DaveP]

As I understand it CGT will be pro rated on the period from PPOR to IPOR. Remember if you hold it as an IP for longer than 12mnths...the CGT is 50%

 

[WillG]

Hi Rooster,

Are you living in a rental now ?

Have you purchased a PPOR ?

If you have not purchased a PPOR since renting your old PPOR you shouldn't have to pay any CGT (I am not a CGT expert and could be wrong).

If you do have to pay CGT then you have to get an estimate of the value of the property when you started renting it or from the time you purchaased your new PPOR. I don't believe your 'capital gain' is calculated on a pro rata basis.

I would do a search on the ATO site http://www.ato.gov.au. They may have an example for your situation.

Good luck,
Will

 

[Rooster]

Will G,

Not living in rental and have not yet purchased PPOR.

Will do a search of that link (might shed some light).

Thanks
Rooster...

 

[Les]

G'day Rooster,

It depends on WHERE you are living now??? If you are now renting, THIS IP can remain your PPOR until you choose otherwise, and thus be free of CGT!!!!

Any PPOR can retain that status for up to 6 years after you leave it. BUT, you might have bought a Capital Growth giant as your own home in Aug 02 - in which case, you might CHOOSE to have it become your PPOR from day one. If THAT is the case, then the IP will lose its PPOR status and become a CGT candidate.

Also, Rooster, I don't hear you saying that you are planning to sell !!! Are you? (or, does it depend on the answer to your question?? )

Calculations for CGT come down to "How much profit you made AFTER it ceased to be your PPOR" - but, first, answer the question i.e. could this STILL be your PPOR ????

Have a professional guide you with this - it can save you thousands by doing it the "right" way.

Regards,

PS If you don't know of such a professional, ask Dale !!!!

 

[Rooster]

Les,

Precisely the info i was searching for. Thanks Mate.

Yes, iam still renting/boarding with mates, so by your info this should definately be CGT free.

And yes, the main reason i ask this question is because i am planning on selling.

Thanks again
......here i come mr accountant!!

Rooster...

 

[Les]

OK, cool, Rooster,

Yes, I am still renting/boarding with mates, so by your info this should definately be CGT free

So now we know where you're coming from, don't be a stranger.... If your accountant doesn't seem to say the same things, come on back.... Not all accountants are equal, if you get my drift. (e.g. how many IP's does your accountant own?)

Disclaimer: I'm NOT an accountant, so don't be guided by information provided.... you know the stuff

Anyway, it sounds like things are OK for you - good luck,

Regards,

 

[WillG]

Sounds like you won't have to pay CGT. Wooo Hooo

I love it when a plan comes together !

 

[Rooster]

Thanks for all the great input.

Cheers
Rooster...