All Topics / Help Needed! / CGT

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  • Profile photo of cabramattcabramatt
    Participant
    @cabramatt
    Join Date: 2011
    Post Count: 13
    December 20, 2011 - 8:18 am

    Hi everyone!

    What are your thoughts on the following and can you please confirm that the facts on CGT is correct:

    I know that you are only allowed to have 1 property as your PPOR and this is free from CGT. 

    I recently bought another house to knock down and rebuild for a better home. The problem is I havent sold my PPOR yet. The market seems slow and I'm not willing to sell below market value so I am happy to wait. However, I hear that the ATO will only allow you a 6 month period to sell your old house and move into your new house.

    What happens if I cannot find a buyer within the 6 month period? How will that affect the CGT I have to pay on my old and new house when and if I sell them?

    I am not renting out the new house because I am expecting to sell soon so I can build but just worried I might need longer than 6 months.

    Thanks.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    December 20, 2011 - 8:37 am

    After 6 months one will have CGT applied to it. From memory it is s118-140 ITAA 1997.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544
    December 20, 2011 - 9:01 am
    Terryw wrote:
    After 6 months one will have CGT applied to it. From memory it is s118-140 ITAA 1997.

    You are one sick puppy Terry – who else knows sections of  the tax act?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    December 20, 2011 - 9:39 am

    Yes, I was correct
    http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.140.html

    I remember it because it is just before the absence from main residence section on 118-145

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of cabramattcabramatt
    Participant
    @cabramatt
    Join Date: 2011
    Post Count: 13
    December 20, 2011 - 9:41 am

    DOH! I was hoping there would be some kind of extension application I can apply for since I am not renting out any of the houses.

    Thanks!!

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    December 20, 2011 - 9:44 am

    If you are not renting a house out then it can be CGT free for an indefinite period under s118-145
    But, this may not apply to one you are constructing because you could no longer claim it as a residence.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

Viewing 6 posts - 1 through 6 (of 6 total)

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