Friend boasted he never paid CGT

My friend boasted that he never paid CGT, is that possible? But he moves houses every 1-2 years.

What I like to know is that did he buy all the houses in one shot, or have to sell the house before buying the next one to avoid paying CGT?

I know the former needs to pay CGT.
 
And remind your friend that the ATO's memory is infinite. If you owe a debt, it doesn't matter the time the debt was incurred they can still chase you for it 50yrs after the fact if they wish. ;)
 
Whilst it is entirely possible due to the reasons Propertunity mentioned, however maybe he was supposed to pay capital gains and thought he'd be smart by omitting the gain. Yes, it would be completely stupid, but believe it or not some people would just try that! However, if he is obliged to pay capital gains tax, he'll be in the **** when the state revenue office and ATO do the matching to check what property has changed hands.

I've had people say to me, they want to claim XYZ deduction because their friend does... just because the friend does, doesn't make it right. Whilst they may be getting away with it for now, if they get an audit, there will be problems! I even had one guy asking me why he wasn't getting a tax refund because his friend was getting one (completely different careers and circumstances). Some people...... :confused: :eek:
 
sounds like he is just pushing the boundaries for PPOR exemption. They need to be careful they are not now in the business of property trading
 
was readint this:
Bill purchased his house in Brisbane in January 2000. He moved in immediately and after six months went on a working holiday around Australia for one year. While he was in Tasmania he met his future partner Maria and lived with her in her rented flat for five years. During this time his home in Brisbane was rented out and was producing income. He returned to Brisbane with Maria and moved back into his home. Several months later, he decided to sell his home. Bill did not own any other properties during this time and is able to treat his home as his main residence and be exempt from capital gains tax on the house as he moved back in within six years.



Can he be allowed to claim deductions for his house when it's rented?
 
Bill did not own any other properties during this time and is able to treat his home as his main residence and be exempt from capital gains tax on the house as he moved back in within six years.

Can he be allowed to claim deductions for his house when it's rented?

Yes

sounds like he is just pushing the boundaries for PPOR exemption. They need to be careful they are not now in the business of property trading

Do you know what the rules are defining property trading? I think this might be what Xenia is talking about regarding a licence to flip?
 
They are property developers!!

If they are indeed property developers, then they would not be paying CGT. The houses they build and onsell are treated as 'stock-in-hand'. Their development company would pay company tax on profits (after expenses) just like any other company, but it would not be CGT.

If their development company provided them with free accom. then they might be up for FBT depending on how they structure things (employee contributions etc), but again they are not up for CGT.
 
If they are indeed property developers, then they would not be paying CGT. The houses they build and onsell are treated as 'stock-in-hand'. Their development company would pay company tax on profits (after expenses) just like any other company, but it would not be CGT.

If their development company provided them with free accom. then they might be up for FBT depending on how they structure things (employee contributions etc), but again they are not up for CGT.




hmmmm, puzzling, then why they need to move house every 2-3 years.......hmmmm,
 
Bill purchased his house in Brisbane in January 2000. He moved in immediately and after six months went on a working holiday around Australia for one year. While he was in Tasmania he met his future partner Maria and lived with her in her rented flat for five years. During this time his home in Brisbane was rented out and was producing income. He returned to Brisbane with Maria and moved back into his home. Several months later, he decided to sell his home. Bill did not own any other properties during this time and is able to treat his home as his main residence and be exempt from capital gains tax on the house as he moved back in within six years.

Bill should be allowed to have a CGT free ride, and lots of deductions.....;):D

bye
 
hmmmm, puzzling, then why they need to move house every 2-3 years.......hmmmm,

Thst is probably how long it takes them to achieve capital growth or to do the renovation.
In Victoria there is some stupid law that restricts how often you can do major renovations and you are supposed to apply to somewhere to be allowed to do major renovation work to your house. (Big Brother!) and I think it as a two year restriction.
 
but i want to know how to earn $$$

Fair enough, but remember what works for one, may not work for another. There are alot of different people on this board, using alot of different strategies to accumulate wealth. Some have even been successful ;) :D - Hopefully What I am doing will work for me, but it certainly isn't how some people approach PI. Plus there is the little fact that your friend doesn't wish to disclose his 'personal' information. And if you value you friendship, I don't think you should push it - some people are just private. Educate yourself throught other means instead (like this board).

Good luck.
 
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