All Topics / Legal & Accounting / Primary Residence and CGT

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  • Profile photo of peejay121764peejay121764
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    @peejay121764
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    May 14, 2006 - 10:31 am

    A quick question…How long can you rent out your primary residence before you are subject to CGT ? A reference as well would be nice thanks

    Peejay[specs]

    Profile photo of elkamelkam
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    @elkam
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    May 14, 2006 - 2:12 pm

    Hello Peejay

    Up to six years in one stretch.

    Here is the link to the ATO where it’s explained.

    http://www.ato.gov.au/individuals/content.asp?doc=/content/36887.htm

    Cheers
    Elka

    Profile photo of TerrywTerryw
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    May 14, 2006 - 2:28 pm

    6 years. Section 118-145 of the ITAA I think.

    Terryw
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    Profile photo of peejay121764peejay121764
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    May 15, 2006 - 3:08 am

    Thanks for your help guys. Thats what I thought, but the reference will confirm it !

    Profile photo of ducksterduckster
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    May 17, 2006 - 11:51 pm

    there is an article about this in may australian property investor

    Profile photo of MagellanMagellan
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    May 18, 2006 - 4:42 am

    Yes , appears that you can escape CGT but what about land tax– here is ref. from O.S.R site
    http://www.osr.nsw.gov.au/portal/page?_pageid=33,284236&_dad=portal&_schema=OSRPTLT
    from this extract it appears that during your absence you can only charge a rent which would just be enough to cover the rates etc on your house. You are also ubable to claim Mortgage repayments as a tax deduction- otherwise you are liable for the land tax. This is my understanding from this extract but happy to be corrected.
    “The exemption will apply if–

    Income is derived from people who occupy the property during your absence, provided it is no more than is reasonably required to cover rates, water and electricity charges and similar outgoings (but not mortgage repayments).”

    Profile photo of TerrywTerryw
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    May 18, 2006 - 2:04 pm

    Good point Magellan. I didn’t even consider the land tax issues! However, this should be minor compared to the CGT savings – except maybe in a flat mrket.

    Terryw
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