Renting before settlement- CGT

[Reality Cheque]

Hi all,

I've just sold my PPOR subject to registering a title and the purchaser wants to rent until settlement which could be a period of about 4 months.

I'm also purchasing a house which will settle on the same day as mine so I'll be renting for the same period.

Will the house (my current PPOR) that I'm selling be classed as an IP and therefore subject to CGT for the 4 months that it is rented or is there any way around this?

Does it make any difference if the rent is paid as part of the settlement?

RC

 

[pickle pickle]

Hi all,

I've just sold my PPOR subject to registering a title and the purchaser wants to rent until settlement which could be a period of about 4 months.

I'm also purchasing a house which will settle on the same day as mine so I'll be renting for the same period.

Will the house (my current PPOR) that I'm selling be classed as an IP and therefore subject to CGT for the 4 months that it is rented or is there any way around this?

Does it make any difference if the rent is paid as part of the settlement?

RC

From the facts you have given you will not have a CGT event as during the period you have rented your main residence, you do not have another main residence. You can rent your main residence for 6 consective years without loosing the main residence exemption, assuming you do not have another main residence.

To be safe, I would try and push back settlement on the place you are buying by a week just in case you have issues with settling your 1st property.