Cgt

Hi all,
have a little dillema that i am unsure about (re-CGT)and thought this is the best place to find out. I purchased my first property (PPOR) 5 years ago and lived at the house until mid last year. I then moved home with my folks and rented it out whilst saving for another deposit. I then purchased another house in November 09 (settled Jan 29 2010). The new property is a renovation/extension and wont be finished until late 2010, so i continue to live with my folks until then. I have however been offered a job promotion that i will have to move away for and was hoping to purchase a new property in that town rather than renting (as it will be a permanent relocation) using money from the sale as a deposit for next property. The question is- Will i have to pay CGT on the first property (current IP) if i have not in fact lived in the second property (proposed PPOR)? Regardless of what happens i will be finishing the extension/renovation before even thinking of selling it and perhaps my partner may even live there until she can relocate her work later this year or early next year. I have a significant amount of equity in the first property i own and was hopefull of releasing that rather than the smaller amount that i will have in property 2. Both my partner and I are still in our 20's and dont want to make a silly mistake by selling the wrong property etc and making a dent in our potential investing strength in the future. We are both very new to IP's so its still a learning curve. Any help will be appreciated

Hope this makes sense- Reno
 
If the first property is sold within 6 years of renting it out, then no, there will be no CGT liability for this property.

As for the second property, you can only have one PPOR at a time, so there would be an overlap between when no. 2 was purchased and no. 1 was sold. Bear in mind also, that the 6 month overlap rule does not apply as no. 1 was being rented out.
 
so my basic hope is that i dont pay CGT on property 1 as i have the greatest amount of equity in this property and would really like to use this money to fund my next home (will become PPOR). So does it not matter that i originally planned for property number 2 to become my PPOR?
 
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