I have been living in my apartment that I own for 6 years. I have bought another house and plan to move into it in a couple of months and rent out my apartment as an investment property.
The aparment has grown in value considerable due to the property boom in the last 6 years. What happens if I decided to sell the aparment in 20 years time. Would I loose the equity I have gained in the last 6 years.? Can I get a valuer to come and value the property and the capital gains ta goes from the value of the apartment today to the date I decide to sell?
You never lose the equity by selling, but you have to look into capital gains tax.
Now it would appear your apartment is exempt. You could probably sell now or within the next 6 years and still claim this exemption. But you can only claim one property at any one time, so if you had a period where you owned 2 properties, you have to chose between the 2 – for the main residence selection.
Better talk to your accountant. It may be wise to get an independent valuation done now.
Terryw
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If i got an idependant valuation now would i have to pay capital gains tax on the gain I have in the last 6 years that I have been living there?
I would like to keep this property for long term ….but my worry is the gain in the last 6 years has been considerable and i would hate to have to pay capital gains tax on it in the future. It has been my only residance in the last 6 years. But I have bought another property and will move into the bigger property now while keeping my old apartment.
I have a friend who owns a house in another town which is now worth big bucks. She originally lived in this and then bought elsewhere and has rented it out for approx 3 years. She would like to sell but thinks she has lost the CGT exemption. I think she could shift back there and live for a year and that would then become her PPR again. Would you agree, naturally she will talk to her accountant about this too.
Fern
My accountant said i could get a valuer value the place on moving out and then when the time comes to sell you would pay capital gains tax on the value of the property on moving to the day of sale. I just wanted to confirm this with property experts?
I have also heard it is pro rato. E.G. Own property for 20 years lived in it for 10 rented it out for 10 years. Therefore capital gain is half.Eg capital gain of 300,000 is 150,000 as percentage of principle place of resinance is 50%????
Any of these right?
From recalling my accounting days both of these options can be used. The standard formulae is time as IP over total time owned however you can also use the valuation method your Accountant advised. Probably best to pay your $500 and get it valued now and then decided later which method to use if and when you ever sell.
Amanda
“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”Thanks I think getting it valued would be a good idea may have more options later. Any one know a good valuer?
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