HI all, I have a question on CGT on my home. I understand that if I sell it it isnt subject to CGT!
Now if I bought another house, fixed it up, sold again, and did the same thing every couple of years, would the ATO tax me on my gains?
The ATO can say that you are carrying this on as a business and therefore ask you to pay CGT. depends on how you structure it.
Also, CGT can apply to your PPOR if it is over 5 acres or if you have used your house for income producing purposes.
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
thanks for your reply terryw.
How could I structure it so I could limit my captial gains exposure?
I am looking to do this on a regular basis (about every 2 years) but I want to make sure I am not whopped with a massive tax bill everytime I sell my home and move onto the next one.
If you have a spouse, you could have turns owning the property. Spouses can only have one PPOR between them, but having different names on different houses helps you to stay under the radar of the ATO. Also consider the reason why you have to keep moving all the time!
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
TerryW: If the PPOR property is 5 acres or more it is subject to capital gains tax? Is this always the case or only in specific circumstances?
Thanks
a person's main residence is usually exempt from CGT, but to get the full exemption, the land size must be 2 hectares or less – I think approx 5 acres (my PPOR is 5 acres!). If the land is lager than this, then there may be partial exemptions available. eg. you can claim 2 H as your residence. You may also be able to choose which 2 H surrounding your home to include in the exemption.
Have a look at the ATO's guide to Captial Gains Tax booklet 2007. lots of examples and it is easy to read.
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
You must be logged in to reply to this topic. If you don't have an account, you can register here.
