CGT question...

[tpw]

Getting 2 different advice on this:

1) Bought IP slightly more than 2 years ago and rented out for 2 years.
2) Moved into IP over 1 month ago, so now is my PPOR
3) Have an offer to buy the property.

Agent tells me that I would be able to get CGT exemption (6 year rule?) if I continue to stay there for 5 more months (ie. delayed settlement).

An accountant tells me that I won't qualify for CGT exemption but will have to pay CGT on a pro-rata basis.

Who's correct?

Thanks.

 

[jrc]

Accountant. A delayed settlement does not mean anything as the date of the contract is what counts

 

[tpw]

Hi jrc, I think the agent thinks that if I stay in the property for at least 6 months, I would qualify for the CGT exemption. Not in this case?

 

[jrc]

No, because your property was income producing before it became your PPOR.

 

[tpw]

Thanks, jrc.... guess I can't trust the agent

 

[vaughan]

Thanks, jrc.... guess I can't trust the agent

You're asking the agent a question they are not qualified to answer.

I'd no more "trust" my accountant to sell my house.

 

[Terry_w]

Getting 2 different advice on this:

1) Bought IP slightly more than 2 years ago and rented out for 2 years.
2) Moved into IP over 1 month ago, so now is my PPOR
3) Have an offer to buy the property.

Agent tells me that I would be able to get CGT exemption (6 year rule?) if I continue to stay there for 5 more months (ie. delayed settlement).

An accountant tells me that I won't qualify for CGT exemption but will have to pay CGT on a pro-rata basis.

Who's correct?

Thanks.

hmm. This is interesting. You ask someone who has no qualifications in tax for the answer and someone with qualifications and you don't know who to believe?

I guess there is a tendency to want to believe the one who provides the most beneficial answer.

 

[Scott No Mates]

Or the one who provides the answer that you want to hear.

 

[tpw]

hmm. This is interesting. You ask someone who has no qualifications in tax for the answer and someone with qualifications and you don't know who to believe?

I guess there is a tendency to want to believe the one who provides the most beneficial answer.

Make no assumption, mate. The agent told me that, without me asking and I decided to cross check with an accountant friend, who is a corporate accountant. She wasn't very sure herself.

 

[soyabean]

tpw, I can confirm that prorata CGT is correct as son went through similar case. He stayed there where property was on the moving up and when it was rent out not much move if not going backward....
I used to think that we could do a formal valuation just before and after the rentout period to determine the non-concession capital gain but apparently not

 

[Ausprop]

I decided to cross check with an accountant friend, who is a corporate accountant. She wasn't very sure herself.

this is like asking a diesel mechanic if your VVT chain on your mazda is about to go... they may have a pretty good idea but they don't specialise or deal with it on a day to day basis so the best person to ask is a mazda mechanic