I have a scenario that I am trying to get my head around.
I purchased a property as a PPOR about 13 years ago for $119,000. Lived in it for approx 3 years, then moved out and purchased a house with by brother 50/50,and turned the first house into IP. Lived in the new house with my brother for about 4 years. He then bought me out of the new property and I used the money to help my girlfriend at the time to purchase a house.She is the only one on the title for the house she purchased as her PPOR and I am on the loan , I moved into the house as well but still have the original property as an IP.
Can I still claim the IP as my PPOR for the last 6 years and only pay CGT on the remaining 4 years that the property was an IP while I was living in a property with my brother that i owned 50/50?
Another question I have if the above scenario can't work is the property is currently tennanted and is in poor condition and valued at approx $260-270,000, Can I have this property valued when I get rid on the tennants, claim it as my PPOR from when they move out as I currently only have this property in my name only ( the house i am living in is in my wifes name only) then clean, paint and renovate the property to increase its value to hopefully sell for around $300-320,000 and avoid paying extra CGT for the extra gain of $30-40,000?
Any help would be greatly appreciated.
Thanks
Hi Hoopers,
Can I still claim the IP as my PPOR for the last 6 years and only pay CGT on the remaining 4 years that the property was an IP while I was living in a property with my brother that i owned 50/50?
No. You would have needed to move back in for a period of 3-6 months once your brother bought you out to re-establish the property as your PPOR. You could have then moved out with your girlfriend and maintained it as your PPOR.
Another question I have if the above scenario can't work is the property is currently tennanted and is in poor condition and valued at approx $260-270,000, Can I have this property valued when I get rid on the tennants, claim it as my PPOR from when they move out as I currently only have this property in my name only ( the house i am living in is in my wifes name only) then clean, paint and renovate the property to increase its value to hopefully sell for around $300-320,000 and avoid paying extra CGT for the extra gain of $30-40,000?
The cost base of the property is the market value at the time you started to rent it out… which based on your info would be around 1999. So if you were to sell the property your Gross Capital Gain would roughly be the price you sell it for, less the market value in 1999… then you need to work out… from 1999 until the date you sell it, what was the % of time it was your PPOR since 1999. You then get that % CGT free.
For example if you live in it for the next ten years it would have roughly been an IP for 10 years and a PPOR for 10 years so 50% .
Phil
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