Hi everyone,
In a few posts people mentioned (as I understand) that if you rent your PPOR out for 6 years, and then sell, you can still avoid payng the CGT.
Can anyone please tell me me how exactly the rule works? Or how I can find out whether I should or should not pay CGT later when i sell?
My situation is this: I have an IP and rent myself. But I am thinking of moving in some time and so making the current IP my PPOR. When later I sell the place, I would certainly be happy to avoid paying CGT. Is it possible?
Thanks in advance!
Hi Keesha,
I believe that in your case the CGT exemption will apply only from when you move into the IP and make it your PPOR. You are liable for tax on any CG that has already occurred, and any CG after the exemption period expires, e.g. when you nominate a new PPOR. Remember, depending on your investing strategy, if you don’t sell there is no CGT!Terry
FinanceHmmmm… so based on that…
Could you buy a place, move in for X months, move out into a rental, wrap the first place and gain any capital appreciation of it for the first 6 years CGT tax free? (assuming you didn’t nominate another place as your PPOR as you were renting?)
Interesting! Very interesting!
Quasimodo [^]
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It seems to me that action has a most magic way of answering all the questions our fearful mind tries to throw before us…
__________________________________________________Hi Quasimodo.
Can’t answer your question – I’m not sure of the legalities. The strategy may not work with a wrap – who is entitled to the Capital Gain? – but may work with a lease/option. The ATO may interpret this as a scheme to avoid tax, rather than something necessary for personal reasons such as travel or employment! Check with a good accountant…Terry
FinanceOops! The missing part of that equation is that obviously you’d still only get the cap. gains if the tennant moved on and you then had the chance to resell…
All shall be duly “accountanted”! Thax Saskatoon!
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It seems to me that action has a most magic way of answering all the questions our fearful mind tries to throw before us…
__________________________________________________Thanks heaps guys!
It is truly a wealth of knowledge in this forum!
Now, I think I better move in sooner rather than later…Cheers!
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