Thanks Terry, you really know your stuff. Since it’s a) then it begs the question in what scenario is it actually useful to get a valuation done (with regards to minimising CGT)?

If i reverse the example and move in for the first year (PPOR), then rent it out for 1 year and no longer treat it as my PPOR (say i buy a second place), would the valuation after the first year then be taken into account?

a) would be the same as in the first example; but
b) would then be 600 – 520 = 80k – discounts adjustments etc etc

Or do I have a choice here with regards to which method is used?

Thanks Terry

Yep that’s along the lines of what I was thinking; move in for 3-6 months, electoral roll, phone, internet, electricity, gas, bank statements, mail etc etc.

Thanks for the article feedback as well – much appreciated!

Adam

Thanks Benny/Terry

I have located the relevant section Terry mentioned s118-145 ITAA97

(2) If you use the part of the dwelling that was your main residence for the purpose of producing assessable income, the maximum period that you can treat it as your main residence under this section while you use it for that purpose is 6 years. You are entitled to another maximum period of 6 years each time the dwelling again becomes and ceases to be your main residence.

So to rephrase my question: What needs to be done after 6 years of renting it out to qualify it as my main residence?

The following information is provided on the ATO website:

The following factors may be relevant in working out whether a dwelling is your main residence:

– The length of time you live there – there is no minimum time a person has to live in a home before it is considered to be their main residence
– Whether your family lives there
– Whether you have moved your personal belongings into the home
– The address to which your mail is delivered
– Your address on the electoral roll
– The connection of services (for example, phone, gas or electricity)
– Your intention in occupying the dwelling.

A mere intention to construct or occupy a dwelling as your main residence – without actually doing so – is not sufficient to obtain the exemption.

It’s still unclear to me as to what needs to be done. So getting back to my original post, does anyone have any experience with ATO regulation in this area?

Regards
Adam