Claiming stamp duty versus paying CGT...

[Pretzel]

Hi guys,

I have an issue that I’m trying to get my head around.

I’m purchasing a property in the ACT.

The intention is to make it an IP for the first 6 – 12 months and then move into it.

I’m doing this so I can claim the entire amount of stamp duty at the end of the 2009-10 financial year – it will put another $5k in my pocket (which I could really do with right now!)

So on to my question.

Is it true that if I rent the property out from the day we purchase it I will never be able to claim it as my PPOR? (Because the intention, in the ATO’s eyes, is that it was purchased as an investment property).

And therefore, would I be relinquishing the CGT exemption that would normally be granted to a PPOR in the event that we decide to sell in the distant future? (I’m assuming I would).

I wouldn’t want to gain $5k now at the expense of paying an exorbitant amount of CGT down the track.

Cheers,

Pretzel

 

[Pretzel]

Sorry guys, I’ve made this question more complicated than it needs to be.

1. If I purchase a property and make it an IP from the start.

2. Then move into it after 6 months.

3. Live in it for the next 10 years and then sell it.

4. Will it be CGT exempt?

 

[rugrat]

It will be CGT exempt from the poin that you move into it, so any CG seen in the firts 6mths will incurr CGT - but from the point you move in, there will be no CGT.

 

[jrc77]

Hi guys,
I’m doing this so I can claim the entire amount of stamp duty at the end of the 2009-10 financial year – it will put another $5k in my pocket (which I could really do with right now!)

Could you please elaborate on this? As far as I am aware you can't "claim" stamp duty as a tax deduction (the interest on a loan to pay it perhaps - but not the stamp duty itself). Is this something I am not aware of (very possible) or is there some other confusion?

Regards,

Jason

 

[rugrat]

Could you please elaborate on this? As far as I am aware you can't "claim" stamp duty as a tax deduction (the interest on a loan to pay it perhaps - but not the stamp duty itself). Is this something I am not aware of (very possible) or is there some other confusion?

Regards,

Jason

Stamp duty is a claimable deduction for properties purchased in the ACT. It has to do with the fact that we are purchasing a 'lease' to the land, not the land itself. Just one of those loopholes.