I was hoping someone could assist with some general advice regarding the tax implications of moving out of your PPOR with the intention to tidy up and rent it out but then changing heart and deciding to sell before it's even been advertised for rent.
We've been a little slack with our property and it's been "vacant" for all intents and purposes (with an accommodating relative looking after it) for the past 4 months but now we think we should sell so that we can spend a little more updating our new property. Unwisely we didn't get a valuation on it when we moved out as we were not 100% sure what we were going to do with it.
Property price for the old place has increased from $285 to $305k in the past 4 months. Could someone advise whether we are likely to have to pay capital gains tax on the increase in value. Approx $130k owing on the original loan and I was hoping that if the loan expenses and property holding costs weren't claimed then there might be no capital gains tax when we sell the old property. Am I dreaming?
Providing that you are not claiming any other property as your PPOR you should escape CGT free (based on the 6 year rule).
see
moving house
http://www.ato.gov.au/individuals/content.asp?doc=/content/36888.htm
6 month period of time cgt exemption could be on both properties
See section titled moving house .Thanks duckster
the ato link was good. I'm relieved to see that we have some time up our sleeve. As we are in first home buyer territory with a tidy property, 2 agents who have seen the property have advised that it would likely sell at the first 1 or 2 open inspections if the asking price is reasonable market rate. It would be great to sell by end of September.The property we moved into was an investment property for the previous owner and so we were hit with having to refund a proportion of land tax paid by them (it was only about $40) at settlement.
Thinking out loud, is there any benefit in not trying to claim a refund for this ($40) in order that the new property be treated as an investment property between settlement (early May 2009) and the end of June. In which case could interest charges and various other costs be claimed for the larger loan for the 2 months before the end of 08/09 financial year?
From 1 July 2009 onwards the new property would then be the new PPOR.
You can only claim if the property was to available for rent by you
Availability of the property for rent is a "relative" term because a relative has been staying there for the past couple of months. I know this is a slippery slope but I'm sure it's not the first time it's been done.
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