All Topics / Help Needed! / Renovating and CGT – Anyone know these answers?

Viewing 9 posts - 1 through 9 (of 9 total)
  • Profile photo of Karl and RitaKarl and Rita
    Member
    @karl-and-rita
    Join Date: 2003
    Post Count: 103

    Hi all,

    Can anyone help with these questions? [confused2]

    1. Is it true that if you live an a property for 12 months as a PPOR and sell within 5 years you avoid paying capital gains tax?

    2. If you live in PPOR and renovate, then rent the property out can you claim the renovation back on tax or do you need to have a tenant in place first BEFORE renovating?

    3. We read in Robert Kiyosaki’s book that he avoids paying capital gains tax by rolling his profits through a “1031 exchange” into a more expensive property, is there an Australian equivilant to this process?

    Any help on these questions greatly appreciated.

    [hmm]
    Thanks

    K&R

    The only thing that limits us…is a limiting belief.

    Profile photo of wealth4life.comwealth4life.com
    Member
    @wealth4life.com
    Join Date: 2003
    Post Count: 1,248

    1. yes and no

    2. yes but depends on time frame

    3. no

    in australia we minimise tax not avoid it, in america one day you will pay, its just a matter of when.

    Profile photo of Karl and RitaKarl and Rita
    Member
    @karl-and-rita
    Join Date: 2003
    Post Count: 103
    Originally posted by resiwealth:

    1. yes and no

    2. yes but depends on time frame

    interesting if cryptic answers. Can you elaborate on this pls?

    The only thing that limits us…is a limiting belief.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    1. If your main residence is rented out, after you first live in it, and sell it wihtin 6 years of renting it, and have no other main residence, then it may be CGT free. There is no requirement to live in it for 12 months first.

    2. You can claim building allowance on any improvements and depreciaiton on any fixtures for a property you rent out.

    3. Not in Australia.

    Terryw
    Discover Home Loans
    Mortgage Broker
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Karl and RitaKarl and Rita
    Member
    @karl-and-rita
    Join Date: 2003
    Post Count: 103

    Thanks Terry

    Helps us out with our plans.

    K&R

    The only thing that limits us…is a limiting belief.

    Profile photo of summersummer
    Member
    @summer
    Join Date: 2004
    Post Count: 23

    To rent your property out for up to 6 years without CGT applying upon its sale you would have to not only have no other main residence but there would need to be a reason why you are renting out your main residence. For example you have moved from Melbourne to Sydney or overseas for for work reasons and cannot then live in your main residence.

    Profile photo of AdministratorAdministrator
    Keymaster
    @piadmin
    Join Date: 2013
    Post Count: 3,225

    I was under the impresion that CGT was now calculated over a 7 year period?

    eg. you were no longer entilited to an exemption for 12mths occupancy as PPoR.

    hmm.. I’m trying to find it on the ATO site now [blink]

    Profile photo of AdministratorAdministrator
    Keymaster
    @piadmin
    Join Date: 2013
    Post Count: 3,225

    sorry guy’s… the ATO’s site isn’t the easiest to get arround (maybe it’s more because of the content…?)

    May be a point mentioning to your account though?

    Profile photo of FroggieFroggie
    Member
    @froggie
    Join Date: 2004
    Post Count: 12

    You may be want to read this book from Anita Bell on your inveatment property she explained all these questions very simply.Very good book.
    Cheers

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