No Capital Gains for 6 years ?

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From: Daniel Brazdil


My question is if you purchase a property and live in it for a short period of time, say 12 months and then move out, is the property then exempt from Capital gains for a period of 6 years. If not how does the aforementioned ATO rule work then? Also if you rent out part of your PPOR would you fall under the same ruling for no CG for 6 years (remembering that the property could not be tenanted there after).
 
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Reply: 1
From: Dale Gatherum-Goss


Hi Daniel!

The rules work to exempt your home from CGT. So, if you live in a house for a little while and then decide not to, yes, you can claim the exemption on that house for a period of up to 6 years.

However, you cannot claim the exemption on another house during that time which may cause a problem for you depending upon your circumstances.

I hope that this helps

Dale
 
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Reply: 1.1
From: Denise Macadam


Hi Dale/Daniel
Please excuse my ignorance - to what are you actually referring to here!
I can quite get a handle on it - Daniel, are you talking about living in a ppr for a short time and moving out and renting same?
Curious, as I have made the decision to rent out my ppr and do some buy/reno/onsells - meaning I will be moving house a lot over the next twelve months. As far as I am aware, i can do this as much as i like without any complications (no CGT etc) - am i right in thinking this.
 
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Reply: 1.1.1
From: Dale Gatherum-Goss


Hi Denise!

Your home remains exempt from CGT if you decide to treat it as your PPOR. This is so even if you rent out your home providing you move back in within 6 years.

The trap for some people is that they fall within your situation and so they cannot continue to claim the original home as exempt from CGT, and, the houses that you move into whilst renovating.

As the old expression goes, you cannot have your cake and eat it too.

Does this help?

Dale
 
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