IP to PPOR

[tester]

I am looking at buying a IP in good area with a intention in a year time I will spend about 200 k to renovation and make it a PPOR.

What is the best way to do that to avoid CGT.
My plan
Buy the property for about 800 k and as it is in ACT claim the stamp duty, then rent it out for a year. Ad the. Renovate with 200 k budget to make it my PPOR.

 

[Jamie M]

Hiya

Be careful with this approach - my understanding is that this loop hole has closed (purchase as an IP and covert to PPOR to claim SD in the ACT).

Speak with a good accountant about this.

CGT would probably be applicable for the duration it's an IP - but again, speak with an accountant.

Cheers

Jamie

 

[tester]

Do we have any accountant here who could help me ??????

 

[Jamie M]

It's an ACT specific issue - so best to speak with a local one who's up to speed with recent changes. I'm not sure if there's an ACT accountant on the forum.

Cheers

Jamie

 

[Terry_w]

I am looking at buying a IP in good area with a intention in a year time I will spend about 200 k to renovation and make it a PPOR.

What is the best way to do that to avoid CGT.
My plan
Buy the property for about 800 k and as it is in ACT claim the stamp duty, then rent it out for a year. Ad the. Renovate with 200 k budget to make it my PPOR.

You cannot avoid CGT if you do not live in it first. (unless there is no growth).

 

[Melbournian]

if you have held it for 2 years, 1 year as ip 1 year as PPOR and then sold it you would have to pay capital gains on the 1st year being it was an IP.

not much you can do - but really depends how long you plan to stay and if the value does go up significantly otherwise if it was 1 year ip and 6 years PPOR the CGT would be minimal in my opinion.

had a PPOR where i had a tenant for 3.5 weeks which was part of the sale (i took over the lease - wanted to get them out but couldn't) and i sold the PPOR after 1.5 years later. i still had to pay CGT on the 3.5 weeks which was minimal.