Hi All
I was asking the question about valuations for my property on another post and subsequently did the call around to find a valuer however I am a bit unclear as to the benefit of me getting an evaluation for my situation. We purchased the place about 18 months ago as our PPOR with the intention to turn it into an IP after living in it for 12 months. As it was tenanted when we purchased it we allowed the tenants to see out the end of their lease which was about 5 months. We then moved in for the following 12 months. We have now moved out (renting) and in the process of purchasing a block of land to build on as our PPOR.
If we are planning to keep this IP for the long term when we eventually sell do we get any CGT exemption for the 12 period we lived in the property or do we forfeit this when we move into our new PPOR?
The issue is that if we do not get any CGT exemption then I do not see any purpose of getting an evaluation except for equity redraw purposes. Any help is appreciated. RegardsChrisYes, you get an exemption for the period it was your PPOR, but getting the 'valuation' method' is not available to you.
Basically, you will pay CGT, when it is sold, for the period it was a rental, asa percentage of the total ownbership period.
ie, held for 5 years, PPOR for 4 years. You will pay CGT on 80% of the capital gain.
Thanks for the info.
hmm ok so getting a proper valuation is not worth it then, for CGT purposes anyway.
I guess you meant to say you don't pay CGT for 80%.
Sorry, yes. If it's your PPOR for 80%, you pay CGT on 20% of the gain.
You can only use the valuation method if you live in the property first, then rent it out. As yours was rented from day one, you can only use the proportion method.
Ahh now that makes sense. I should have not been such a nice guy and pushed the tenants out when I purchased the place. Oh well everything is easy in hindsight Thanks heaps.
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