Hi all,
I figure the easiest way to ask my question is with a scenario.
a) Bob buys a property for $200k (with a loan of $160k)
b) Bob lives in it for 2 years then moves out and moves in with a mate. When moving out he refinances his loans from P+I to IO and also gets a LOC for any spare equity (for a rainy day). During this process the bank tells him they've revalued his property at $240k so will lend up to $192k with no LMI.
c) 8 years later Bob sells the property for $600k
What would be Bob's capital gain for tax purposes in this scenario?
If, 6 years after moving out, he has the property valued at $500k, would this change the situation?
I guess the crux of my question is, if a person moves out of a PPOR and does not sell within 6 years, is the CG taken from when they move out or the 6 year mark? If the first case, then could the bank valuation be used as 'evidence' to the ATO that the price had gone up and therefore reduce the CGT? If not, can valuers backdate valuations?
Thanks for any help.
poyner
I figure the easiest way to ask my question is with a scenario.
a) Bob buys a property for $200k (with a loan of $160k)
b) Bob lives in it for 2 years then moves out and moves in with a mate. When moving out he refinances his loans from P+I to IO and also gets a LOC for any spare equity (for a rainy day). During this process the bank tells him they've revalued his property at $240k so will lend up to $192k with no LMI.
c) 8 years later Bob sells the property for $600k
What would be Bob's capital gain for tax purposes in this scenario?
If, 6 years after moving out, he has the property valued at $500k, would this change the situation?
I guess the crux of my question is, if a person moves out of a PPOR and does not sell within 6 years, is the CG taken from when they move out or the 6 year mark? If the first case, then could the bank valuation be used as 'evidence' to the ATO that the price had gone up and therefore reduce the CGT? If not, can valuers backdate valuations?
Thanks for any help.
poyner