A friend of mine emailed though a link to an article for me to look at after a discussion we had Christmas eve. http://www.afsd.com.au/article/aip/aip23a.htm
He is of the understanding we will not have to pay any capital gains tax when we sell our first deal as we have used the first home buyers grant and making it our PPOR while we complete the renovation.
Have any of you any ideas or experience with this?Your friend sounds correct. If you are living in the house, and have no other, then when you sell you should be free of CGT. But if you are doing it with the intention to make a profit, ie a business, the ATO could assess the profit as income.
Also, if you have another place, you can only claim one as your main residence at any one time (except for a 6 month cross over period which is allowed).
You could also lose the exemption if you are making money from the property – eg renting one room out while living there.
Terryw
Discover Home Loans
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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