Can anyone with an accounting background, tell me if you have to pay Capital Gains Tax if you sell your house under the two year mark. I have lived in the house for about one year and am lokking to sell, but was advised against it as I was told I would have to pay CG tax????????[fear]
Originally posted by murph38:I have lived in the house for about one year
But owned it for two years? What was happening with it for the rest of that time?
If it’s only ever been your principal place of residence, then I think it should be CGT exempt. However, if you were renting it out for some of the time, then it would probably be different.
GP
I think you don’t have to pay CGT for 6 year if your property is prinipal place of residence.
Cheers
PropertyGuRu [sultan]
Mortgage Consultant
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Greatpig,
I have only owned the house since the start of the year, but was warned about selling it before the two year mark due to CGT. Thank you for your input. It helped to confirm that the person telling me that may have been misinformed…Murph[biggrin]
Murph,
Yes your informant is somewhat misguided.
CGT does not apply to your PPOR (principal place of residence), however if it is an investment property, then you must have owned it for a minimum of ONE YEAR (not two) to be eligible for CGT 50% reduction, that is you will still have to pay CGT but at a reduced cost.
Furthermore, there is a 6 year exemption period, which allows you to move out of your PPOR, turn it into an IP and as long as you do not claim another property as your PPOR (during this time) you will not have to wear the CGT bill.
Cheers,
Jo
Originally posted by murph38:but was warned about selling it before the two year mark due to CGT
The only thing I can think of is that if you bought it and sold it again soon after, even if you did live in it during that time, the ATO may try to say you were doing it as a business (ie. buying and selling property for profit).
I don’t know much about it, but I wouldn’t have thought there’d be much chance of having a problem in that regard.
GP
Murph,
Did you inherit the property??? [blink]
Sounds like something I was told back when my mother passed away, and solicitors threw this “2 year period” at me during probate stages of settling her estate.
If so, you may need to check with a legal eagle, as I believe the 2 years has been reduced to just one.
Cheers,
Jo
Murph,
I wouldnt have a clue but I know your accountant will. Speak to them, they will help out for your particular situation. We don’t know your situation so its hard to give advice. Best of Luck.
Broome,
Do you want to be paid when people pay their telephone bills.
http://www.homebizleaders.com/4537Thanks all for the advice…
Jo, No I didn’t inherit the prop, bought it in April this year…
I feel better knowing I have alot of advice on hand from people who know alot more than I do, thanks again guys…Murph[strum]
murph38
I am not sure how long you need to have lived in your ppor before you are except from CGT but I have just found out that as long as you meet the requirements you have a six month period starting from the time you move out to sell & you will not attract CGT .
I would suggest getting some professional advice to confirm the information you are seeking is correct before you take any action.
Good luck…..
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