All Topics / General Property / Capital Gains Tax – HELP!

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  • Profile photo of By JoveBy Jove
    Participant
    @by-jove
    Join Date: 2005
    Post Count: 11
    May 25, 2005 - 10:29 am

    Need some advice on CGT please. Am a CGT “virgin” so please bare with me!
    My PPOR is a property which I currently have tenanted. Have had the said property for 8 years. Am currently renting as we have just moved interstate. Am looking now to purchase and would like to sell the tenanted property. I am led to believe that if I sell this property prior to purchasing another, there are no CGT implications. However, if I purchase new property before selling existing property I stand to have CGT on either this property or the new one when I sell it. Is this correct? Property has valued up significantly since purchase.
    If correct, can anyone suggest the best way to avoid? It is unlikely that I will sell existing property prior to purchasing new one but really want to get into new property in new city. We are very keen on a property but this is now the only ‘show-stopper’ for me…HELP…

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    May 26, 2005 - 12:21 am

    Section 118-145 of the ITAA (1997) says you can claim your main property as your main residence even if it is rented, for a maximum of 6 years.

    There is another section of the act which states you can actually have 2 main residences for a period of 6 months to allow for cross over periods.

    So you should be able to buy, then sell without CGT if you can do it within 6 months. Please check this with your accountant.

    Terryw
    Discover Home Loans
    North Sydney
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Nigel KibelNigel Kibel
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    @nigel-kibel
    Join Date: 2005
    Post Count: 1,425
    May 26, 2005 - 12:25 am

    Hi Jove

    I agree with Terry

    I would also get your accountant to obtain a ruling in writing from the tax department to protect your interests

    Nigel Kibel

    http://www.propertyknowhow.com.au

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