When buying a property using the FHOG and then selling the property, after the required period of living in it. Does the first home owner have to pay any Capital Gains Tax?
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Positive Cashflow Financial Analysis Calculator OnlineThere is no CGT payable on the PPOR.
If you rented it before you moved in or owned another home in the meantime there may be a CGT liability.
Cheers,
Simon Macks
Interest Free Home Loan Agent
http://www.mortgagehunter.com.au
0425 228 985Fully Accredited With Derivex PTY LTD and IFHL PTY LTD
***Ask about our Interest Free Home Loan***
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
According to the ATO website (http://www.ato.gov.au/individuals/content.asp?doc=/content/20427.htm&pc=001/002/026/003&mnu=1051&mfp=001/002&st=&cy=1), the following are exempt from capital gains tax –
Exemptions and exceptions
Generally speaking, you disregard a capital gain or capital loss on:- an asset you acquired before 20 September 1985
- cars, motorcycles and similar vehicles
- compensation you received for personal injury
- disposing of your main residence. This can change depending on how you came to own the residence, whether it is on more than 2 hectares of land and what you have done with it—for example, if you have rented it out, you may be liable to some tax when you sell it
- a collectable—for example, an antique or jewellery—if you acquired it for $500 or less
- a personal use asset—for example, items such as boats, furniture, electrical goods and household items used or kept mainly for personal use or enjoyment—if you acquired it for $10,000 or less. You also disregard any capital loss you make from a personal use asset, irrespective of the cost
- the exchange of shares and units you own in a company or trust that is taken over if certain conditions are met
- shares in a company or interests in a trust where there has been a demerger and certain conditions have been met, or
- disposing of an asset to which the small business 15-year exemption applies. There are a range of concessions that allow you to disregard part or all of a capital gain made from an active asset you use in your small business. For more information see Guide to capital gains tax concessions for small business (NAT 8384-5.2003).
I’m sure that whether you are a FHO or not is irrelevant.
Regards,
Shushar“All our dreams can come true, if we have the courage to pursue them.” – Walt Disney
You know why that cars are exempt?
Because they go down in value, which would mean everyone would have Capital Losses!
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
Click below to email meTerryw | 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
Thanks for your replies.
Simon, I maybe getting in contact with you soon [wink].
And just a follow up question!
The scenario of buying and applying for the FHOG, and then renovating the property and re-selling 12-24 months down the track and profiting say, 40k. That would attract no CGT? Yeah?
JAffasoft,
We have done that. Bought using our FHOG, are currently renovating and may sell or rent out in the near future. Our property has gone up $40K already and it isn’t even finished!!!From what we have researched, no there shouldn’t be any capital gains.
Steph.Success is 1% inspiration and 99% perspiration.
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