Should I sell property to take advantage of no CGT

[r3ckless]

Looking for some input.

My current PPOR is an OTP unit that settled earlier this year. As far as I am aware, there is no CGT applicable as long as I live in this unit for a reasonable length of time, and sell within 6 years of ownership.

I plan on moving back home around March 2015. As a result I would have resided in this unit for around the 8 month month. As long as I am correct that no CGT is applicable shall I sell and realise a capital gain... I am not sure if I should sell the property all not. I purchased this proeprty for $550k. I believe I would only look at selling if I can sell for $800k minimum. This being the case, I am looking to gauge your input if it is worthwhile.

As this property qualified for the FHOG benefits, no stamp duty was payable so I am not at a "loss" for that at all. If I were to sell, I would use the net sale proceeds as deposits to acumulate further investment properties/stocks depending on conditions. However being a brand new property, should I be concerned that I will not be able to maximise further depreciations in comparison to buying other investment properties that are not as new etc?

I think at this point, as long as I can obtain $800k as a sale price, I think I will sell to take advantage of the profit without paying tax. But looking to get other perspectives to tell me not to sell instead.

Ta,
Alex

 

[macca446]

Looking for some input.

My current PPOR is an OTP unit that settled earlier this year. As far as I am aware, there is no CGT applicable as long as I live in this unit for a reasonable length of time, and sell within 6 years of ownership.

I plan on moving back home around March 2015. As a result I would have resided in this unit for around the 8 month month. As long as I am correct that no CGT is applicable shall I sell and realise a capital gain... I am not sure if I should sell the property all not. I purchased this proeprty for $550k. I believe I would only look at selling if I can sell for $800k minimum. This being the case, I am looking to gauge your input if it is worthwhile.

As this property qualified for the FHOG benefits, no stamp duty was payable so I am not at a "loss" for that at all. If I were to sell, I would use the net sale proceeds as deposits to acumulate further investment properties/stocks depending on conditions. However being a brand new property, should I be concerned that I will not be able to maximise further depreciations in comparison to buying other investment properties that are not as new etc?

I think at this point, as long as I can obtain $800k as a sale price, I think I will sell to take advantage of the profit without paying tax. But looking to get other perspectives to tell me not to sell instead.

Ta,
Alex

Hi
You say 800k as a sale price so are other units in the block selling for that or have you had it valued if so then yes it would be a great profit but you need to work out your strategy of investing and what you want to achieve if you know that then making a profit like that can enhance your investment journey.
Macca446

 

[r3ckless]

No, this is just the figure that I am happy to sell it for in 5ish years. Anything under that amount, I cannot see the time and effort spent in advertising the place, the strategy is to continue acumulating IP's, and building my share portfolio.

 

[Terry_w]

If you lived in it from the date of settlement and didn't claim any other property at the same time then it will probably be exempt from CGT. However if you rented it out for another 6 years then it could still be exempt.

If you sell now you will be buying another property in its place. Factor in selling costs and purchase costs, which could be about 5 to 10%. Also consider whether this one could grow further and also the CGT free nature - would you live in another of the purchased properties? If not then you would have no CGT free asset.

 

[r3ckless]

well our plans for hte next 5 years are to live at home iwth the folks.

Thus we should be able to get 2-3 properties before getting a new PPOR in 5 years time. So to asnwer that question Terry, no after this unit, tehre will not be another PPOR for awhile.

If we had to pay stamp duty on this purchase, I would be most likely not selling, but the fact that no stramp duty was paid, and living in it can get exemptions for CGT, these are the two factors that are driving us to sell...

 

[Rob G.]

Listen to what Terry just told you.

You may be able to move back in with your parents and rent this for up to 6 years without any CGT if you nominate this house as continuing to be your main residence.

I am really concerned that tax seems to be your primary consideration.

 

[Jaggannath]

If you never sell it you'll never pay CGT... perhaps if you've bought well that's an option

 

[wategos]

CGT may not be an issue if prices stagnate or fall, a very real possibility over the next 5 years.

 

[wylie]

If you don't live there for one year won't you have to pay some stamp duty?

 

[see_change]

Where is it ? What is it ? 2 bedder etc

Cliff

 

[Perp]

I am really concerned that tax seems to be your primary consideration.

I have to give kudos to somebody else, apparently.

 

[r3ckless]

Listen to what Terry just told you.

You may be able to move back in with your parents and rent this for up to 6 years without any CGT if you nominate this house as continuing to be your main residence.

I am really concerned that tax seems to be your primary consideration.

Well thats the plan! reducing tax is definiately not my primary objective. It may seem that way with all the recent threads/posts. As it is an area that I have not much knowledge in, hence my posts. On the outset looking in, one may think that is my only consideration, but it is not. I only ask questions to what I dont know....

If you never sell it you'll never pay CGT... perhaps if you've bought well that's an option

This is originally the strategy, but as an accoutnant friend was better educating me about the no CGT benefit, it was something that I was exploring to see if it was beneficial for me or not.

CGT may not be an issue if prices stagnate or fall, a very real possibility over the next 5 years.

Well this option would only be executed/considered shall I obtain a sale figure of $800k or more...