I recently bought an investment property, which I plan to move into myself
I notice that the taxation office, quantifies Main residence, that you move in at the earliest possible time
It also states this does not count if there is a tenant in your new property at the time
However, as I was renting myself, when I bought the property, I therefore have a lease myself that I have to honour
Does anyone know, can I then claim this property as my main residence, and therefore not have to pay CGT
if I sell it after living there for 12 – 18 months or moreI believe a property cannot be your main residence until you live in it. But I also recall reading something about "as soon as practical"…… not sure where now. There probably won't be much gain over the short period before you move in, so not much to worry about.
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
Unfortunatley as my current lease is for 18months, this does make a bit of a difference
There are a number of decisions which are quite clear that as soon as possible means just that, not as soon as it is convenient to you.
http://www.smh.com.au/money/borrowing/practicable-is-what-ato-preaches-20100524-w6ps.html
You can either get the property valued when you move in and have a record of what the sell price was when you moved in.
As you have moved in you actually create a capital gains event by changing from investment to main residence.
The valuation is one method and gives you a record. THe main thing is to keep records for the life of the asset !The other is that you can proportion the time you had it as an investment as opposed to the time it was a main residence.
ie
Capital Gain taxable = number of days as investment property * capital gain / (total number of days owned)
As the property market is slowing down the gain should be small and if over 12 months you get a 50% discount on the capital gain.Duckster unfortunately is incorrect, if it is a PpOR from the beginning and you rent it out your cost base is reset from the time it is rented out, if it is an IP and then becomes a PPOR the cost base is not reset although your costs when it is a PPOR eg interest rates etc can get added to your cost base
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