Hi Guys,
Just got a question about PPOR and capital gains.
If you built a house while you are renting and the house you build is going to be your PPOR, when will the 12 month time frame kick in? Is it when you’ve bought the land for the house to be built on? Or is it after the house has been built and you’ve moved into it?
Cheers
Wayne
Wayne Leech
*Below are links to my websites – any feedback, comments would be appreciated:)
http://www.landsearcher.com.au – List your land for FREE (Private sellers only)
http://www.homesearcher.com.au – List your property for FREE (Private sellers only)Hi Wayne,
If the house is indeed your PPOR then there is no CGT payable for the duration of time you live in it. This period of time can be extended by up to six years if you move out and do not own another PPOR during this time.
The 12 month rule applies to capital investments and does not apply to PPOR. Any investments held for more than 12 months and 1 day qualify for a 50% reduction in CGT.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Derek,
At the moment I don’t have any PPOR. I own a property in merriwa (which is rented out) and the block in yanchep though at the moment I’m renting with my girlfriend.
So if I continued renting, purchased a block of land – built a home on it – then moved into it to finish it off (I’d estiamte about 2-3 months to add the finishing touches). Then sold it – i wouldn’t be hit for capital gains?
Thanks for your continued support!
Cheers
Wayne
Wayne Leech
*Below are links to my websites – any feedback, comments would be appreciated:)
http://www.landsearcher.com.au – List your land for FREE (Private sellers only)
http://www.homesearcher.com.au – List your property for FREE (Private sellers only)If the house is indeed your PPOR then there is no CGT payable for the duration of time you live in it. This period of time can be extended by up to six years if you move out and do not own another PPOR during this time.
Derek
[email protected]Hi Derek, I don’t understand this concept. Could you elaborate, please.
Cheers
C@34
Hi Wayne,
There may be an issue with the block and then the house as they may be considered different CG events and as such you would need to run this past an accountant and/or the ATO.
You would certainly need to establish that you did, in fact, live in the property too. Electricty bills, telephone, rates notices all addressed to you will assist as will your enrolment on the electoral roll at the address.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by calvin@thirty4:Quote:This period of time can be extended by up to six years if you move out and do not own another PPOR during this time.Hi Derek, I don’t understand this concept. Could you elaborate, please.
C@34
Hi Calvin,
When you live in your PPOR any capital gains are tax free for the duration of the period it remains your PPOR.
This CG free period can be extended by up to six years if you moved out (work transfer, choose to rent etc) and did not buy another PPOR in that six year period.
Eg I live in my home for 10 years and then go away for 5 years and then sell my property. The whole 15 years is CGT free if I didn’t declare another PPOR.
For full details I recommend a serach of the ATO website and search CGT.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
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