Hi all,
I purchased a PPOR which settled in March 2003 – I moved in that day,
In January 2004 I moved to a new place, as a renter, shared with a friend who owned the home. This friend became my wife later (I only mention that in case its pertinent)
Anyway, I rented out my old home a few months after I moved out. I did not have a new PPOR in my name until November 2007, which is where I live now (I did buy other IPs in between 2004 and 2007, but did not live in them).
If I sold my old PPOR now – what happens with CGT?
Is CGT only payable from when I moved into my new PPOR in November 2007?
Example
Value of old PPOR November 2007 500k,
Value of old PPOR July 2010 580kis CGT then 80k, (or 40K with the 50% CGT discount applied??)
Or do I have it totally wrong?
Cheers in advance..
What has happened with your wife's house you moved into? If this has been sold and your wife has claimed the PPOR exemption, then your POR exemption will only be until you moved in. If it has not been sold then you and your wife need to look at whether half the PPOR exemption should go to both houses or the whole to one house.
The second issue is that your original PPOR needs to be valued at the date you moved out rather than the date you got another PPOR in 2007.
crj wrote:What has happened with your wife's house you moved into? If this has been sold and your wife has claimed the PPOR exemption, then your POR exemption will only be until you moved in. If it has not been sold then you and your wife need to look at whether half the PPOR exemption should go to both houses or the whole to one house.The second issue is that your original PPOR needs to be valued at the date you moved out rather than the date you got another PPOR in 2007.
Hi,
It was sold in early 2008. We didnt, or havent claimed any exemption.
I was hoping that MY old PPOR was considered as such until I moved to the house we are in now, in November 2007.
Valuation may be an issue…? I dont think I have one for that specific date frame.
Cheers
pwinne wrote:It was sold in early 2008. We didnt, or havent claimed any exemption.I was hoping that MY old PPOR was considered as such until I moved to the house we are in now, in November 2007.
Valuation may be an issue…? I dont think I have one for that specific date frame.
Cheers
Unless your wife has shown a capital gain on her house in her 2008 tax return, then effectively the exemption has been claimed. and your current PPOR that you moved into in 2007 will not be exempt either from the period to the date of the contract of the sale of the house in 2008.
crj wrote:pwinne wrote:It was sold in early 2008. We didnt, or havent claimed any exemption.I was hoping that MY old PPOR was considered as such until I moved to the house we are in now, in November 2007.
Valuation may be an issue…? I dont think I have one for that specific date frame.
Cheers
Unless your wife has shown a capital gain on her house in her 2008 tax return, then effectively the exemption has been claimed. and your current PPOR that you moved into in 2007 will not be exempt either from the period to the date of the contract of the sale of the house in 2008.
so none of the below applies??
http://www.ato.gov.au/content/downloads/NAT4151_07.pdf
page 74
"Home ceases to be the main residence and is used
to produce income for one period of six yearsLisa bought a house after 20 September 1985, but
stopped using it as her main residence for the 10 years
immediately before she sold it. During this period, she
rented it out for six years and left it vacant for four years.
Lisa chooses to treat the dwelling as her main
residence for the period after she stopped living in
it, so she disregards any capital gain or capital loss
she makes on the sale of the dwelling. The maximum
period the dwelling can continue to be her main
residence while she used it to produce income is six
years. However, while the house is vacant, the period
is unlimited, which means the exemption applies for
the whole 10 years.
In addition to this, as the dwelling is fully exempt because
Lisa made this choice, the home first used to produce
income rule does not apply"I'm confused… sorry
As far as the tax department is concerned my old home can be declared as PPOR, until I sell it, which I'm doing (correct me if I am wrong)
I'd planned to declare the capital gain from November 2007 – August 2010, which may be 100k (or 50k if the 50% CGT discount is applied); and stating that my
Just out of interest does the ATO has some consideration for couples regardless of the 'actual' ownership situation..??
None of these houses have my wifes name on the title – my wifes house did not have me on title.
cheers
i should add my wife hasnt done a tax return in 8 years… no PAYG income..
I am watching TV while reading this, so cannot concentrate enough to digest it all.
But basically I couple can only have one main residence between them. Couple includes married and defacto.
You can claim the main residence exemption from the date you move out of your main residence until it was sold, for up to 6 yrs, as long as you do not claim any other residence as you main residence at the same time. see s 118-145 ITAA 1936.
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
hmmm, thx Terry.
I have a dilemma, time to hit up my accountant. thx for all the responses.
cheers
Terry,
So If I acquired a new property in November 2007, I assumed that the old place ceased to be my main residence.
I also assume that the CGT is based on the value igrowth between November 2007 and Ausgust 2010.
..
You can still class a place as your main residence, even if absent. s118-145 ITAA
http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.145.htmlso depending on your circumstances you could class the old one as your main residence and sell it and pay no CGT. But if you did this your new one wouldn't be exempt.
See also s118-185 ITAA for the method to calculate the partial exemption.
http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.185.htmland under s118-190 your cost base of the property is set to the value the date you moved out.
http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.190.htmlTerryw | 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
This si quite common to have one PPOR which you are not living in. In my situation we moved out of our PPOR 18 months ago, and have bought another house we live in which we are not intending to claim as our PPOR because ultimately we want to move back, on the other hand we want to be able to put pictures up, and do things with the yard here without having to get permission from a landlord
thx gents for your responses.
I need to talk to my accountant.
cheers
You must be logged in to reply to this topic. If you don't have an account, you can register here.
