Hi all i am wondering if anybody can advise on whether i would be exempt in any way from CGT on a property which i purchased and live in as my PPOR. The sticking point is that i let the lease on the property run out before moving in which was two months after settlement thinking that it was the right thing to do for the tennant. However it now appears that should i wish to sell the property i would be up for CGT given that i did not move in as soon as practicable according to the ATO. I moved from interstate to this property and am wondering if this would provide for an exemption from CGT and more importantly the need to keep records for the duration of ownership. Hope this makes sense
Hi Juder
I don't think you have much to worry about. It was only an investment for 2 months, so the CGT would only apply to the growth during this period – if any.
you probably have a good case for moving in as soon as practical too.
Best to check with your accountant.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks for that Terry. I was more worried about record keeping requirements than the small amount of CGT payable, but as you say might be best to check with my accountant
Providing they can show the new premises is their PPOR eg water & council rates notices (possibly sent to the address) or electricity account in their name should be adequate proof.
Just to touch on this topic of 'as soon as practicable' again…
Can someone shed light on how this rule might be applied in the following scenario:
A buyer is looking to move to a different area and finds the ideal PPOR property, though not yet ready to move
The property is purchased now, settles in 1 month
The buyer does not move in until 3 months after settlement, due to work commitments
They remain renting until then — they do not already own a PPOR
The purchased PPOR property sits vacant until then (it is not rented out in the meantime)
The market remains stagnant (no capital growth)
As they have not moved in 'as soon as practicable' are they still eligible for PPOR CGT exemption in the future?
Would it be worth getting a formal re-evaluation at the time they move in order to determine that no capital gains occurred in that 3 month gap between settlement and moving in?
Cheers
O.K. So just get the mail sent there… and invest in a big mail box
Cheers
and remember to go and collect the mail too. It costs nothing to get the power connected to the property but make sure that the hot water and everything else is turned off.
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