We are going to rent out our non-investment house and make it an investment opportunity.
A friend recently advised that CGT can be avoided if having lived in a property for at least 1 year then renting out for at least 5 years then moving back in for another year ensures there is no CGT to be paid on the net capital gain. Anyone else heard of this? or know where we may get some more info?
Will follow up with an accountant but thought I might try here first.The road less travelled makes all the difference
Yes. You can still treat it as you main residence for a period of up to 6 years, even if it is rented out. But you can only claim one property to be you main residence. It comes under section 118-145 of the Income Tax Assement Act (i think-from memory).
Terryw
Discover Home Loans
North Sydney
[email protected]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 bozzies, welcome to the forum.
If the house is your PPOR, and you lived in it from when you first owned it, you can move out and rent it for up to 6 years, move back in, move out, 6 years etc. with no CGT.
HOWEVER, you cannot claim another place as your PPOR during that time. You can only have one (except for one 6 month overlap if selling after purchasing your new one).
Cheers
MelBTW, there is not minimum period specified in which you must live at the house to class it as your main residence.
Terryw
Discover Home Loans
North Sydney
[email protected]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
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