Non-resident Property QuestionsApologies for the eight questions but I need to get to the bottom of this !!I am a non-resident who owns a home in Europe (not IP) but now spend at least 6 months of my time each year in my house in Oz. Will my Oz house be recognized as my PPOR as it is my only Australian property? Or will it be seen as an IP as I bought the house abroad first?The Oz house was originally built as a holiday home and not built as an investment property, but was rented out after I used it for the first 6 weeks. The initial rental period was for three years before I used it myself for 4 months. After that I again rented it out for a further 18 months. I have since used the house myself as my PPOR in Australia for the last 2 Yrs.Was a period longer than 4 months of living in the property required to get PPOR ? If my first 4 month period of personal use does qualify as PPOR ( main residence ), will this allow me to then use the 6 yr rule for renting out from that time in order to mitigate CGT liability for the 18 month rental period and any future rentals? Or will I have to count the 18 months rental plus any future rentals against CGT as well as the first three year period ?Assuming the Australian house can be deemed my PPOR in Oz and the 6 yr rule can be applied after renting ceased, is it possible to use the house valuation/ possible sale value at the time the house first became my PPOR to work out any future CGT liability ? ( partial exemption ). Or do I have to use the sale value as and when the house is finally sold which hopefully will be years down the line?
regards
John
You haven’t had any replies to your thread so far and I would suggest that you phone the FIRB and have a chat to them. Re CGT you can call the OSR. An internet search will give yo both the above contact numbers and more information.
John – you don't say if you are a resident in Australia for tax purposes (this is different to your immigration status – you could be a resident for immigration purposes but a non resident for tax). If so then I suspect you will be able to claim the Australian home as your main residence. There is no minimum period required to live in a house to make it your main residence – it will depend on the circumstances.
Tony – I don't think the FIRB could help, FIRB deals with foreigners investing in Australia, not tax, nor the OSR for Capital Gains tax as this is a commonwealth tax collected by the ATO.
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Thanks Terryw and Tony for the comments
I agree that FIRB and OSR will not be the route to go.
Just to clarify, I am a British citizen with all close family in Oz and do not have permanent residency status here yet, but have obviously paid tax against previous years rental income.
I understand that I was required to live in the property for three months after construction completed and was not able to do that at the time, but would now like to have Oz house recognised as my PPOR in Oz. I do spend most of my year here. But my timings in the property are as per initial comment and all questions relevant.
John
I was having a bad hair day.
Have just seen thread from Dan42 from 8/9th April 2010 about PPOR and CGT exemption where it says that if you did not live in the house straight away after settlement, the house can never be classed as your PPOR, will always retain the IP status, and the 6 yr rule can not ever be used. I assume this is correct and law ?
This is a bit of a bummer as I would like to have re-rented the house out again without increasing cgt liability. If it boils down to pro-rata Time rented to Years owned, I would have to own the house for quite a while to alleviate the cgt burden.
How does owning the land / settlement affect Years Owned for cgt purposes ? I bought the land 12 months before house completion.
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