I had purchased 2 bed townhouse as my PPOR in Dec 2010 for $320K in Toongabbie NSW. Lived their till Feb 2015 and then moved to California with a new job. My PPOR has been rented out since April 2015 (almost 2 years). Now – I am back in Australia but renting out in a different suburb (due to better school district).PPOR is still rented out. Current estimated market price is $500K.
My questions
1. If i sell it now – do I have pay CGT?
2. If NO – How long I can keep it as rental property without incurring CGT?
3. If YES – what is my CGT liability in terms of $? How can I minimize CGT ? Should I move back to PPOR and then sell it to minimize CGT or even make it zero.Cheers,
Manish-
This topic was modified 7 years, 8 months ago by
mkbonline.
Hi Manish,
I believe the answers are all good, based on your words. Since you haven’t moved into another PPOR (you are renting yourself, right?), this rented one IS your PPOR for up to 6 years after you left it.
So, this is what I believe – but do wait for an accredited adviser to confirm….
1. As it is your PPOR, and remains so unless you purchase another, you would have no CGT to pay if you sell it now.
2. Up until the 6 year anniversary of your moving out of it. Hence, if you remain renting yourself (i.e. you DON’T nominate an alternative PPOR) you can continue to rent the old PPOR without paying CGT on sale. After that 6 year mark, everything changes – so do check with an adviser before you reach that point.
3. Not applicable in current circumstances.That should have put a smile on your face eh? ;)
I usually stay away from this kind of question – especially if it is a bit “curly” – as I am not an accredited adviser at all. I do believe my answers are correct though as your situation appears to be quite straight-forward.
The main reason I answered at all is that it is a weekend, so getting an answer from a business person who IS accredited might have been a long shot – and I figured, if it relaxes you somewhat to hear my answer, then good !!
Enjoy your weekend,
Benny
Thanks for quick response Benny. Yes – it does bring smile to my face hearing that I can hold it for upto 6 yrs of moving out without incurring CGT. However – i do plan to purchase a new house as PPOR – so I believe that I should sell existing PPOR first and then buy a new one.
I look forward to more responses from accredited adviser in this forum.
Thank you. This place is great !
1. Probably no cgt based on. Want u wrote.
2. Up to 6 years from date Friday rented
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
Hi Terry,
“Auto-correct” strikes again…..1. Probably no cgt based on. Want u wrote.
2. Up to 6 years from date Friday rentedTranslated, these should read:-
1. Probably no cgt based on what u wrote.
2. Up to 6 years from date first rentedBenny
Lol
Thanks Benny.
Didn’t have my glasses on
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
Hi Manish,
1. If i sell it now – do I have pay CGT?
No, as long as you have moved in straight away.2. If NO – How long I can keep it as rental property without incurring CGT?
6 Years from the date it was rented outHope this helps.
________________________________________________________________________________________________________James Mav
http://www.accountancymatters.com.au-
This topic was modified 7 years, 8 months ago by
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