Valuation for CGT (IP to PPOR & PPOR to IP)

[tpw]

Hi all,

I'm planning to move from my current PPOR to my IP and convert my PPOR to IP. Can you please confirm on the following?

1) I should get a valuation for the purpose of CGT for my current IP that I'll be moving into?

2) The valuation should be done on the date of the conversion? Would ATO mind if the valuation was done 1-2 week prior to the conversin?

3) I don't think a valuation is needed for my current PPOR, which will be converted to an IP. The reason being that the CGT when the propert is sold will not be based on the valuation of the property when it's converted to an IP, but rather the % of time it was an IP. Pls correct me if I'm wrong.

Thank you.

 

[HotRod]

I think

I think going from a discussion in another thread, it's exactly the opposite.

PPOR to IP - Val
IP to PPOR - proportion of time

 

[dan c]

Yep, Hot Rod is spot on.

You need the valuation for the property that was your PPOR, and becoming an IP. I'm assuming it was your PPOR from day one.

Valuation is required from when the property ceases to be your PPOR.

 

[coastymike]

hotrod is right.

just posted this article I wrote a while ago but here it is http://www.omegapartners.com.au/2010/12/capital-gains-tax-renting-the-family-home/

1. purchase property. don't move in. rent out. move in later. cgt based on formula.

2. purchase property. move in as soon as practicable. move out. rent out. valuation from date you first moved out. note 6 year absence provisions may apply.

 

[tpw]

Thanks for the feedback. Yes, you are all correct. I read about it some time ago, and somehow got confused all over again.

 

[BMan]

PPOR to IP - Val
IP to PPOR - proportion of time


can IP to PPOR be a val? if not why not?

 

[Terry_w]

PPOR to IP - Val
IP to PPOR - proportion of time


can IP to PPOR be a val? if not why not?

http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.190.html

 

[coastymike]

because the legislation stipulates the method you are to use for calculating the capital gain/loss

 

[matto_]

as for the valuation - who needs to complete it - can you get a local realo to complete it?

 

[Aaron_C]

as for the valuation - who needs to complete it - can you get a local realo to complete it?

No it has to be a certified valuation by a valuer.

 

[w0nnie]

We are doing exactly the same thing in coming weeks, swapping IP and PPOR, I searched the forum to see whether i could use a local agent to do the valuation or a certified valuer. As noted above it must be a valuer.

Can anyone recommend a valuer for the outer Sydney western suburbs, as it is going from PPOR to IP, i am wanting the highest valuation as possible to reduce future CGT commitments, therefore im guessing that it is best to have a physical valuation as opposed to a desk valuation sometimes used by the banks?

cheers

 

[Pablo]

OK I have another scenario for you.

I converted our old PPOR to an IP and at the time of financing the banks loan officer said she would supply me with a copy of the valuation so that I could work out the CGT if I every sold. However despite my constant asking it never eventuated.

Moving forward I have now sold the property and will need to work out the CGT this year. What is the best way to proceed? The bank wont give me the valuation, can I get a valuer to do a back dated valuation? or is there another method I acn use?

For the record the property was valued at $450k at refinancing and I then sold it a year and a half later for $420k (thanks to the current market and tenant who didn't look after the property as good as us).

Thanks.

 

[Aaron_C]

Yes you can get valuers to do 'backdated' valuations for CGT purposes.

 

[Terry_w]

Valuer can do a valuation at a date in the past.

 

[Pablo]

Thanks guys,

Does the valuer have to have access to the property?

My accountant was talking about using the cost plus method but my understanding was that this was for ip's that had never been a PPOR.

 

[Terry_w]

No access needed.