Hi everyone,
Does anyone know if you pay CGT on your primary residence if you sell under 12months. We intend to live in and renovate 2 properties per year.
Comments on this idea appreciated.
Thanks, MartinDear Martin, There shouldn't be any CGT to pay on your principal place of residence even if you do sell under 12 months. This is a great plan and I wish you well in your endeavours.
Debbie
Oh but I just thought Martin,
If you buy an acreage property you only get CGT free on the land component that is 5 acres or less.
Property investment is full of twisty-turny things so keep a good accountant by your side at all times.
I've made great money at this fun game so I am sure the average person can too.
Debbie
Give some consideration to stamp duty. You may pay a higher rate (Investment) if you dispose of the property under 12 months (QLD).
The ATO can still force you to pay CGT on your main residence if you are conducting a business there or if they think you are buying and selling as a business. There are no guidelines (AFAIK) that say how many properties you can buy and sell before this happens. Maybe youshould get ready a few good reasons for moving all the time – distance, neighbours, allergy etc!!
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
Dear Martin
This is my first comment on the forum. To answer your question, there are many main residence CGT exemption that you may be able to claim. To name a few:
1. You can claim main residence exemption if you are changing main residences – a taxpayer can have concurrent exemption for two dwellings up to 6 months. However the main residence (old) was your main residence for a continuous period of at least 3 years in the 12 months ending when the existing main residence is sold.
2. You can claim exemption if you are building, repairing or renovating a dwelling – you can claim up to 4 years if you are building your main residence (new).
The ATO will look at your pattern of main residence trading (buy and sale within 12 months) because the nature of your transaction is more important that the face value. So therefore if you buy and sale a lot using the same exemption, the ATO may challenge you that you are property trader and will deny your exemption. So please check with your accountant.
I hope this is helpful to you.
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