Thanks Mortgage Hunter,

Thanks for your opinion. I have also thought it would be good to put profits from sale of IP into an offset account linked to the PPOR, instead of straight into the loan. Would this also allow us to access/use the profits without paying a redraw fee?

Does having an offset account linked to your PPOR change the interest rate or conditions on the PPOR loan at all?

Does $896 per quarter or almost $3600 per year not sound inaccurate though!?

It can’t seriously be that much.

ACT – $584 per year
Orange, NSW – $3,600 per year!

It does not make sense! It’s not fair, how can they get away with this!?? Expecially when there are pot-holed roads, <edited>ty intersections and the like around here!!???

I think I want to move back to Canberra.

What an utter joke!

pasandbec

that’s strange, considering Capital Gains Tax is based on the value at thetime the place started being rented out. Would of thought Capital Loss would be the same….

I directed my last post at PropertyAngel, but really, I’d like anyone’s advise on this matter.

Thanks all,
pasandbec

to clarify the question….

we have a house in canberra that we’re putting on the market soon.

brought for 196,000 will sell for 270-280k ish
say $70,000 in equity there.

do you mean a seperate/independant offset account?
to do that we need to borrow a minmum of $50,000 (already rang the bank)

thanks.

Monopoly and others,

I’d really appreciate if you took a look at this (response from this CGT specialist company I emailed) and see what you think….thanks.

_________________________________________

As you have established both properties as your main residence and moved in as soon as practicably possible, you have a choice as to what property was your main residence for CGT purposes, so long as you do not claim another property as your main residence for the same period of time.

Therefore, the ACT property (Property A) was your main residence from October 2002 to August 2004 (even though rented from Sept 2003 as you have not claimed another residence as your main residence as you were renting).

Option 1:

Property A remains main residence for CGT purposes (for up to October 2008) under absentee owner 6 year rule with NO Capital Gains Tax payable on sale of Property A. HOWEVER the property you are currently living (Property will be subject to CGT as it would be regarded as non-main residence from August 2004 (even though you are living in it) until you sold Property A.

Option 2:

Property A main residence from October 2002 until August 2004 and non-main residence from August 2004 until sold (CGT payable) AND Property B CGT exempt.

The choice of selecting the main residence for what period is made when either one of the properties is sold.

Summary:

Sell Property A with NO CGT payable BUT incur CGT upon sale of Property B OR Sell Property A and pay some CGT AND NO CGT liability to date on Property B.

To work out the CGT liability for non-main residence Property = (net sale price less gross cost price x (non-Main Residence period/total ownership period).

If Option 1 is chosen – relevant legislation would need to be produced under an ATO audit & record and calculation of current CGT liability on Property B needs to be kept.

If Option 2 was selected then relevant legislation & calculation would have to be made in the year of sale of Property A.

CGT Solutions can provide relevant legislation and calculations.

Regards

CGT Solutions

Hello,

Thanks for your reply. Please see my responses below in red.

Cheers,

Penny.

To: ‘pasbec’

Sent: Friday, March 04, 2005 7:52 AM

Subject: RE: Capital Gains Tax

Hi Penny

Thank you for your question regarding Capital Gains Tax (CGT).

In order to give you a solution to your question, we need to clarify some of the facts.

On what date (approximately) did you:

1. Purchase and move into the dwelling? August and October 2002, respectively.

2. Rent out the property? September 2003

3. Intend to sell the property? This year, hopefully April, May or June

When you moved out of the property and rented it out

1. Where did you live? (e.g. rented accommodation, overseas or another property you purchased) Rented until August 2004, when the house (we brought in June) settled and we could move in.

Have you (or your spouse) owned another property during the ownership of the ACT property? Yes, the one we currently live in.

Depending on the answers to the above questions, you may or may not be liable for CGT upon sale of the property.
___________________________________________

Thank you for your question regarding Capital Gains Tax (CGT).

In order to give you a solution to your question, we need to clarify some of the facts.

On what date (approximately) did you:

· Purchase and move into the dwelling? August and October 2002, respectively.

· Rent out the property? September 2003

· Intend to sell the property? This year, hopefully April, May or June

When you moved out of the property and rented it out

· Where did you live? (e.g. rented accommodation, overseas or another property you purchased) Rented until August 2004, when the house (we brought in June) settled and we could move in.

Have you (or your spouse) owned another property during the ownership of the ACT property? Yes, the one we currently live in.

Depending on the answers to the above questions, you may or may not be liable for CGT upon sale of the property.