Hi Guys,
How long do you have to live in your PPOR to apply for the full Capital Gains Tax exemption? Eg: If I move in, renovate and then sell 3 months later do I have tp pay CGT on profits?
Also, If I subdivide my block and sell off the back while living in my PPOR will I have to pay Capital Gains Tax or GST on this sale?
Thanks heaps,
Brad
On the second point first, yes you will pay CGT on the subdivided parcel of land, yes you will either wear or have the purchaser bear the GST (depending upon the property & buyer).
As for CGT on the PPOR, I do not believe that there is a minimum timeframe however check the ATO website.
Again, not advice from an accountant but my understanding.
For it to be your PPOR you have to satisfy the ATO that it really is. So you have utilities in your name WITH a realistic bill. Car, licence, vote, incsurance etc registered at that address. And you should be fine. With regards to selling in a short time frame after a reno, on a once off you should be OK. It is if it occurs more than once every 2 years then the ATO may flag you. Similar to building a spec home with the intention of selling it after living in it briefly. It then moves into the area of a buisiness. Also depends on how professional you are being (eg buisiness cards promoting yourself as a poperty investor etc), then you may not get much sympathy claiming to be just a little guy.
Get the ATO to send out their current CGT booklet. It has a lot of good examples that will help.
MickAnd yes, I second Scotts comment thatthe vacent land would be subject to CGT, possibly also GST so work your numbers out with this in mind.
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