All Topics / Legal & Accounting / CGT on ‘chopped’ PPOR

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  • Profile photo of Property WAProperty WA
    Member
    @property-wa
    Join Date: 2005
    Post Count: 132

    Hi all,

    Im a bit stuck with the following situation.

    If I have a PPOR and an investment property, decide to move into the investment property and then rent out my prior PPOR ……

    what would be the CGT implications if after 6 months living there I decide to subdivide, retain the front and sell the back block off?

    Know there’s a straight forward answer somewhere I think Im just looking for a complicated answer when there doesn’t have to be one.

    Profile photo of fernfurnfernfurn
    Member
    @fernfurn
    Join Date: 2005
    Post Count: 139

    I would imagine your answer is the same as to “Subdivision Tax Question” You would have to pay CGT on selling the back block. Your front house as PPR wouldnt attract CGT when you sell. Obviously tax would be payable on earnings from your old PPR (now IP) You can ring the tax dept. and ask all these questions and they are very obliging.

    Fern

    Profile photo of Property WAProperty WA
    Member
    @property-wa
    Join Date: 2005
    Post Count: 132

    Hi fernfurn,

    Thats basically what I was thinking so think Im on the right path.

    Thanks for your post.

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544

    Hi PWA,

    I would also recommend you download a copy of the ATO’s CGT guide.

    It has a number of examples, one of which is the scenario you are currently investigating.

    Derek
    [email protected]
    http://www.pis.theinvestorsclub.com.au
    0409 882 958
    Skype – derekjones2113

    Profile photo of Property WAProperty WA
    Member
    @property-wa
    Join Date: 2005
    Post Count: 132

    Great..thanks Derek!

    Much appreciated.

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