Taxation Rules on own home

[markj]

I was hoping someone could help with information regarding own home rules.

If buy your own home for X value what is the Y period of time you must live in it to escape capital gains tax? 1 month 2 etc.

Once you live in your house for Y time then rent it out as an investment property can you negatively gear the property? if so does this effect the capital gains rule, living in your house for Y time.

Thanks
Mark

 

[buzzlightyear]

Markj,

Taken from 'About Capital Gains Tax' NAT4151a (p67) under the heading Is the Dwelling Your Main Residence, it states the following factors that maybe relevant in working out whether a dwelling is your main residence.

1. The length of time you live there, however there is no minimum
2. Whether your family lives there
3. Whether you have moved your personal belongings into the home
4. The address to which your mail is delivered
5. Your address on the electoral roll
6. The connection of services (eg phone, gas, electricity)
7. Your intention of occupying the dwelling


Yes, you can negatively gear the property under the scenario you have mentioned. Your main residence can be rented out and be exempt from CGT for a period of 6 years, as long as you do not take up another main residence ie you would have to rent, house-sit...

 

[markj]

Thanyou Buzzlightyear,

So this means if I meet all the criteria below:

1. The length of time you live there, however there is no minimum
2. Whether your family lives there
3. Whether you have moved your personal belongings into the home
4. The address to which your mail is delivered
5. Your address on the electoral roll
6. The connection of services (eg phone, gas, electricity)
7. Your intention of occupying the dwelling

I could then rent the property out, negativley gear the property for a period of upto 6 years without incuring any capital gains tax?

 

[buzzlightyear]

1. The length of time you live there, however there is no minimum
2. Whether your family lives there
3. Whether you have moved your personal belongings into the home
4. The address to which your mail is delivered
5. Your address on the electoral roll
6. The connection of services (eg phone, gas, electricity)
7. Your intention of occupying the dwelling

Those are guidelines, I don't think you necessarily need to meet all. If however you meet most, then you would have met the substabtive requirements of a residence being defined as a PPOR.

I could then rent the property out, negativley gear the property for a period of upto 6 years without incuring any capital gains tax?

Yes, but as per my rider in the following

Yes, you can negatively gear the property under the scenario you have mentioned. Your main residence can be rented out and be exempt from CGT for a period of 6 years, as long as you do not take up another main residence ie you would have to rent, house-sit...

 

[markj]

Thanks for the reply Buzzlightyear.