Is my understanding correct?

[ferdinandch]

Guys

This is my situation, I have 2 properties, A is my PPOR (has always been), and B is my IP (has always been).

Then I am planning to build another PPOR, call it C - however I don't want to live there straightaway, I am planning to rent it out for 1 year - I believe I can claim interest deduction during and after construction period if my intention is to rent it out - I was told for at least 1 year.

During construction period, I will be living in a rental property D, hence I will be renting out my current PPOR - A.

Will main residence exemption apply to PPOR C for whole period - even if I claim interest during its construction period- considering I don't claim any PPOR during construction and construction + 1 year of PPOR C?

My understanding is that I can claim 1 PPOR in any given time - given that I will be renting out my PPOR A - and will be renting in a rental property D. At the same time, because I will be renting out property C for at least a year - I should be able to claim interest on it.

I know it is quite confusing, any advice will be great.

 

[Scott No Mates]

Correct me if I'm wrong. ....you can't live on a vacant block hence it can't be a ppor until complete.

If you can't live in it before you rent it out then it will be subject to cgt from day one. It can't be a ppor and a tax deductible rental simultaneously if there isn't a house.

I broke the ice, now let fully lucky respond

 

[thesuperman]

Correct me if I'm wrong. ....you can't live on a vacant block hence it can't be a ppor until complete.

Why not? You could always pitch a tent & camp out on the vacant block

 

[Scott No Mates]

Is camping on the block an approved occupancy?

Can it be classified as a genuine attempt at a ppor? What level of proof is required to justify the habitation as a ppor.

 

[Terry_w]

Will main residence exemption apply to PPOR C for whole period - even if I claim interest during its construction period- considering I don't claim any PPOR during construction and construction + 1 year of PPOR C?
.

No. it will be subject to CGT on a % time held basis.

 

[Terry_w]

Why not? You could always pitch a tent & camp out on the vacant block

Nope, there are many cases about this involving people living in caravans etc. There has to be a 'dwelling' on the land.

 

[GaryT]

Actually land CAN be subject to the PPR CGT exemption in certain circumstances - i.e. house is destroyed.

You can also choose to treat land as your main residence for up to four years before a dwelling is constructed and becomes your main residence.

The problem that ferdinandch has is that in his/her case the house has never been lived in by him/her and so the PPR exemption can never apply until they move in.

IF you moved in as soon as practicable after the house was constructed and stayed at least 3 months, you could then choose to treat the land and house as your PPR.

 

[sanj]

I watched a video on YouTube and can confirm that all 3 properties can be your ppor simultaneously.

 

[Scott No Mates]

YouTube is pretty much the authority. I could see that two houses can be ppor simultaneously ie new purchase and one currently on the market (for a limited time period) but you'd be hard pressed to justify that you can have previous on the market, living in one and the third under construction.

 

[coastymike]

I watched a video on youtube and it told me michelle obama is a pre op transsexual. Sorry couldnt resist.

 

[D.T.]

I watched a video on YouTube and can confirm that all 3 properties can be your ppor simultaneously.

Yep, I've spreadsheeted this scenario too.