All Topics / The Treasure Chest / Main Residence exempted from Capital Gains

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  • Profile photo of arunapattamarunapattam
    Participant
    @arunapattam
    Join Date: 2003
    Post Count: 1
    September 2, 2003 - 11:53 am

    Hi,

    We recently built a four bedroom house and are living in it at the moment. After moving in we found that this house is too big for a couple with a 2 year old baby. At the same time we heard about Depreciation and Building writeoff which would reduce our taxable income very much. This would inturn allow the property to take care of itself without we need to give any money for this property. Also, we heard that if we declare this as a main residence we can rent it out for a maximum of 6 years and another period of 6 years following that and would not attract any capital gains if we declare this house as our principal place of residence.

    We would be renting a smaller place for ourselves in the same area and buy another investment property for which we are happy to pay CGT when we sell it.

    Can this be done? Is there any catch in this that we need to be aware of?

    Regards,
    Aruna.

    Profile photo of Mortgage HunterMortgage Hunter
    Participant
    @mortgage-hunter
    Join Date: 2003
    Post Count: 3,781
    September 2, 2003 - 10:45 pm

    Aruna,

    You are correct except I am not too certain about the second 6 year period. I think you may need to reoccupy it between the two periods.

    Cheers,

    Simon Macks
    Mortgage Hunter
    [email protected]
    0425 228 985

    Profile photo of arunapattamarunapattam
    Participant
    @arunapattam
    Join Date: 2003
    Post Count: 1
    September 2, 2003 - 11:47 pm

    Hi Simon,

    Thanks for confirming it.

    Yes, If we want to rent it out for the next 6 years, we have to re-occupy it and then let it out.

    But, I heard that when you rent your main residence you should have some compeling reasons to do so. Like a transfer inter-state or something. I want to know whether I can let the property out but still live in the same suburb by renting out in that suburb.

    This benefit that is offered looks really good, that’s why I am doubting as to whether they is any catch to this which we need to be aware of.

    Regards,
    Aruna.

    Regards,
    Aruna.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    September 3, 2003 - 5:30 am

    I don’t think you need to give any reason. You should be able to live next door and still claim the CGT exemption. Ring the ATO and check (but don’t give your name of course).

    Terryw
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

Viewing 4 posts - 1 through 4 (of 4 total)

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