6 year rule and CGT – vacant property enough?

There is no 3 month time limit. You could leave it untenanted indefinitely and still claim the CGT exemption.

see s 118-145 subsection 3
http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.145.html

Please explain?

What exactly could be less than 3 months/?

Sufficient for what?

See the link above for s118-145 . It can be left untenanted forever and still be CGT exempt (under certain circumstances).

separately, If you are talking about income tax then if it is vacant and you are not advertising then you generally could not claim any interest during this period.

I think we are talking about two separate things here.

Once the property earns income, the clock starts on the six years. To re-activate as your main residence, and be exempt from CGT, you must move back in within the six year timeframe.

If the property is NEVER rented, you can leave it empty indefinitely and it can still be your main residence.

In your situation, you would need to move back in within six years for it to be CGT free.

LC

You are still confusing different issues I think.

1. CGT.
A main residence can be left vacant indefinitely and be free of CGT.

2. Income Tax
A residence can be left vacant for any amount of time, but you could not claim any costs unless it is available for rent and you are actively looking for a tenant.

Sorry to burst the bubble but that's not right.

You can only leave it indefintely and still call it your PPOR, as long as it never earnt income.If it was rented out, you must move back in within six years for the property to remain CGT free.

You will need to move back in after the tenants move out, to keep the property CGT free.

i think what is being asked is    how can i reset the 6 year clock??  

We just did this, we kicked out the tenants (did'nt renew the lease).

On the advice of our accountant upon the 6 years of owning a property in Melb, my partner (was her PPOR when purchased) moved back in for 4 weeks. But she did not actually physically move back in. This is VERY important. YOU MUST BE ABLE TO PROVE THAT YOU MOVED IN.

To do this we put the elect & gas on, changed all her Id's and mail to the Melb address, had her friend go there everyday and run the heater so the elect bill will show fluctuations and usage. Her mother would pick up the mail every week. She even went as far as flying down to Melb (we live in QLD) when the tenants moved out to prove she moved to Melb.

After 4 weeks, we advertised the property for lease and it took 2 weeks to rent. So in total she moved back in for a total of  6 weeks. The 6 years will commence again.

We lost 6 weeks rent, however the CGT would've been heaps more of a loss.

I think you are trying to ask if you could just leave it vacant so the 6 year rule will start again. We were told YOU MUST PROVE THAT YOU MOVED BACK IN and that there was no specific rule as to how long you had to live there for the 6 years to start again. .

You must actually move in to reset the clock and you may need good evidence to prove this if challenged or audited. There is no minimum time period in the legislation either.

If you rent it to tenants and they move out and you wait 2 months then move in it would only be your main residence from that 2 month period. This is unless you had lived their prior to the tenants moving out. If was your main residence and the tenants had lived there for exactly 6 years and then you waited 2 months to move in then there may be issues as the property had earned income. The legislation isn't clear on this, but ATO publications suggest that the first 6 years would be CGT free but the next 2 wouldn't.