I have an IP that is pretty old and terrible and am considering pulling down and building my own house on. For tax purposes, does that have any implications – apart from the fact I could no longer claim etc etc.
If I sold it off, I would have to pay CGT but if I build a new dwelling and live there for a couple of years, are there any implications when I sell?
Rakky ;P
Hi Rakky,
A few questions first, if I may:
1. Is the IP the only property you own???
2. How long has it been a rental property???That is, if it is (ie. you are currently renting where you live) you will be exempt from CGT for up to 6 years, but you must not have purchased another PPOR within that time.
You are correct, if you sell the IP (notwithstanding the conditions above) you will pay CGT but only for the period in which the property generated income (rent).
Cheers,
Jo
Hi Monopoly,
Does the 6 year CGT exemption only apply if you move from your PPOR into a rental and not purchase a another PPOR within 6 years?
Thanks
roboYes Robo,
I believe so. That is, you can move out of your PPOR, choose to rent it out, not buy another PPOR (but pay rent from someone else instead) for up to 6 years, provided you do not purchase another PPOR in that timeframe.
Cheers,
Jo
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