Confused about CGT ?

[tasha83]

Hi,
I'm really hoping some of you knowledgable people can point me in the right direction with this question.
We sold our IP (in my husband's name) in December 2011. I'm now trying to figure out what we need to take to the accountant to work out our tax.

Husband originally bought the house in 1999 with his sister (2/3 share). Bought her out in 2004. The house was our PPOR until 2007 when we moved to QLD.
Rented it out from 2007 until we sold it last year.

Bought current house in QLD in October 2009.

We had a valuation done on the NSW house (IP) in 2009 when we bought the QLD house. I sort of assumed this was all we needed to work out Capital Gains Tax, ie the house was classed as a PPOR until we bought this house. It was valued at 295k in 2009 and sold for 312k so this was not a large capital gain.
Now trying to do more research I think I am wrong? How do I know how to work it out? Can you some how get a backdated valuation to 2007 or does it have to go on the original purchase price from 1999?

Do we have the option of continuing to call the NSW house his PPOR until we sold it (less than 6 years after moving out) thus avoiding the CGT thing even though we bought another house in 2009? The QLD house was more expensive, but due to the property price slump here it would be unlikely to have increased in value at all since we bought it. If we go down this path, how do we work out what to do when we sell the QLD house?

Thanks for your help. We will be seeing the accountant but I need to know what info to organise before we go.

 

[ozmale42]

Because he bought the IP after 1996 and, presumably, didn't live in it straight away (I say presumably because he and his sister bought it as an IP initially...right?) I think CGT will apply on a proportionate basis based on the years used as an IP over total years of ownership. Ideally you would have a valuation at each point the property became/or ceased to be a PPOR and also at the date your spouse bought out his sister . I don't think he can take advantage of the 6 year rule unless he lived in it immediately after buying it in 1999.

If he lived in it from day one he will get the 6 year exemption but will likely not get the main residence exemption on the QLD property from 2009 until you sold the NSW property.

 

[tasha83]

Thanks for the info.

He did live in it from the day he bought it.

I think we can claim CGT exemption on it up until the date we bought our QLD house, but I need to organise a valuation from 2007. Does anyone know how best to do this? Do you just call up a valuation company?

 

[birchcorp]

NSW PPOR until 2009 will be good as you can elect the main residence exemption as you have noted (6 year rule). The QLD property will be the main residence from 2009. Supply the valuation to your accountant from 2009 and I am sure he will be happy.

 

[kiwipaul]

The 2009 valuation is the one that is required (forget 2007 it's irreverent) as you kept the property as your PPOR until 2009.
As the gain is only $17,000 I would expect your selling costs were greater than this and so you might not have any tax liability but a CGT loss to carry forward.