G'day all, any advice/comments on the following is greatly appreciated.
I purchased my first and only house in 2003 as an investment property. I was living abroad and therefore didn't require residing in the house until only last year when I returned to Australia.
The property was purchased for $190,000 in 2003 and valued recently at $300,000.
I want to add value to the property with a 2 story extension and then sell it next year 2011, for a guestemated $480,000.
My questions are:
1:
If I sell now, as it was an IP from purchase Jan 2003 until Jan 2008, then I moved in and it became PPR, how would the capital gains tax work?
That’s 5 years as IP and 2 years as PPR, therefore would this prorate the CG of $110,000 over 7 years, then I only pay CGT on the 5 years as IP.
2:
If I now renovate and add a further $180,000 value, would the CGT for this added value be prorated over the whole period of ownership, or based on the years of owning it as a PPR and therefore be CGT free?
Any help is much appreciated.
Cheers
I purchased my first and only house in 2003 as an investment property. I was living abroad and therefore didn't require residing in the house until only last year when I returned to Australia.
The property was purchased for $190,000 in 2003 and valued recently at $300,000.
I want to add value to the property with a 2 story extension and then sell it next year 2011, for a guestemated $480,000.
My questions are:
1:
If I sell now, as it was an IP from purchase Jan 2003 until Jan 2008, then I moved in and it became PPR, how would the capital gains tax work?
That’s 5 years as IP and 2 years as PPR, therefore would this prorate the CG of $110,000 over 7 years, then I only pay CGT on the 5 years as IP.
2:
If I now renovate and add a further $180,000 value, would the CGT for this added value be prorated over the whole period of ownership, or based on the years of owning it as a PPR and therefore be CGT free?
Any help is much appreciated.
Cheers