Development Tax

[Chomp]

I just bought a block with an old house on the front. My plan is to;

1. Rent the front house out and build on the back.
2. Move in to the back house using it as my PPOR
3. Demolish the old house on the front
4. Build a new house on the front and sell it so I can reduce my mortgage on the back.

Is it worth me moving into the front house and renting out the rear one for a year before I sell it?

Regards
Chomp

 

[Chomp]

Was this a silly question?

Chomp

 

[Terryw]

Just remember you can only claim one property as your main residence at any one time.

 

[reeco]

Was this a silly question?

Chomp

it was asked. Why is it silly? ...because you know and someone else doesnt?

I like to know the answer also. Hope that doesnt make me silly aswell

 

[Chomp]

Thanks Terryw, I realise I can only claim one ppor but it doesnt really answer the question. I did see my accountant a couple of weeks ago, he advised that it wouldnt make any difference if I lived in the new front house for a year before selling it.

Reeco, I asked the second question, no one had responded so I thought it may be obvious, good to see that other people are interested in the answer / options.

Regards
Chomp

 

[Terryw]

Well, I think if you do live in the front one while renting the back then you can claim the main residence CGT exemption on this one, but will lose it on the back house for the same period. But at least this will delay the payment of CGT.