FHOG, PPOR and CGT implications

Viewing 6 posts - 1 through 6 (of 6 total)

bigdenis
Participant
@bigdenis
Join Date: 2003
Post Count: 3
March 11, 2007 - 6:25 am
Hi all – I’m a first timer here, so please be gentle.
My question is that if I purchased a unit with tenants in there, and their rental contract doesn’t expire for another 8 months, what are there CGT implications when I finally move into the unit as my PPOR?
I understand that from the outset, if I were to move in immediately, I would be exempt from CGT for 6 years if I were to move out of the unit after having satisfied the “living there for 6 months within the first 12 months” criteria of gaining the FHOG. However, this situation is different in that I can’t immediately move in, even if I wanted to.
Any help greatly appreciated.
Mortgage Hunter
Participant
@mortgage-hunter
Join Date: 2003
Post Count: 3,781
March 11, 2007 - 7:04 am
You would be liabl;e for a CGT component for that 8 months. Given that it is reduced by 50% four months later I wouldn’t be too concerned about it – it will be a small proportion of any profit and will be smaller the longer you own the property.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
bigdenis
Participant
@bigdenis
Join Date: 2003
Post Count: 3
March 11, 2007 - 7:24 am
Simon, thank you for the quick response.
My next question is, once I’ve lived there for half a year (having made it my PPOR for the minimum period of time), and if I decide to move out and have tenants in for the next 4 to 5 years, is this CGT exempt?
Mortgage Hunter
Participant
@mortgage-hunter
Join Date: 2003
Post Count: 3,781
March 11, 2007 - 8:37 am
yes – as long as you dont own another home as well.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
bigdenis
Participant
@bigdenis
Join Date: 2003
Post Count: 3
March 11, 2007 - 10:28 am
Once again, thank you Simon. I really appreciate your help. You’re a legend!!
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
March 11, 2007 - 1:11 pm
Hi
I am not sure, I think there is provision for purchasing a house that is already tenanted, where you can still claim it as your main residence as long as you move in as soon as practical.
Terryw
Discover Home Loans
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