tax question

Viewing 10 posts - 1 through 10 (of 10 total)

Ollie
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@ollie77
Join Date: 2014
Post Count: 30
May 25, 2014 - 6:01 pm
I purchased my ppor which was leased for 18 months before we moved in. We have lived here for 8 years and are thinking of selling. Is there a cut off time for CG?
Ollie
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superAndrew
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@superandrew
Join Date: 2014
Post Count: 188
May 25, 2014 - 9:49 pm
Hi Ollie
Your CG = Market price of your PPOR when you moved in – Purchase price.
Andrew
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crj
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@crj
Join Date: 2004
Post Count: 618
May 25, 2014 - 10:48 pm
Sorry Andrew, many people think you value the
property when you move into it after it has been an IP. however, under Section 118-185, the capital gain that is assessable is your capital gain multiplied by the number of days it wasn’t your main residence divided by the number of days that you own it
Ollie
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@ollie77
Join Date: 2014
Post Count: 30
May 26, 2014 - 7:02 am
Cheers, lucky I have kept good records plus living in it for 8 years will reduce the CG. Will be searching for a good property accountant today to help reduce my CG.
Ollie
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superAndrew
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Join Date: 2014
Post Count: 188
May 26, 2014 - 8:37 am
Hi CRJ
That’s what I thought initially but this example on the ATO website says otherwise.
https://www.ato.gov.au/General/Property/Your-home/Buying-and-selling-your-home/Main-residence-exemption-from-capital-gains-tax/
Andrew
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Rob G.
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Join Date: 2010
Post Count: 70
May 26, 2014 - 9:05 am
superAndrew wrote:
Hi CRJ
That’s what I thought initially but this example on the ATO website says otherwise.
https://www.ato.gov.au/General/Property/Your-home/Buying-and-selling-your-home/Main-residence-exemption-from-capital-gains-tax/
Andrew
Inappropriate quote
s.118-192 market value cost base deeming only applies for a dwelling that would have been a 100% exempt main residence prior to first using it to earn assessable income.
The original post indicated that this dwelling was initially an IP
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
May 26, 2014 - 6:21 pm
Ollie wrote:
I purchased my ppor which was leased for 18 months before we moved in. We have lived here for 8 years and are thinking of selling. Is there a cut off time for CG?
9.5 years of ownership, approx 20% rented so approx 20% subject to CGT.
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PLC
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@plc
Join Date: 2012
Post Count: 400
May 27, 2014 - 11:36 pm
As it was rented out first then the CGT is calculated proportionally to the time rented out.
If it was lived in first then the calculation would be different.
That’s just the way the ATO laws are.
Cheers
Tom
- This reply was modified 10 years, 5 months ago by PLC.
- This reply was modified 10 years, 5 months ago by PLC.
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Ollie
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@ollie77
Join Date: 2014
Post Count: 30
May 28, 2014 - 8:00 am
Yes sounds right, off to the accountant on Monday to have it all sorted. My next big question is since moving in we have spent 120k on renovations so the house price has gone up is that included in the CG? I have kept all invoices just incase.
Ollie
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Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
May 28, 2014 - 9:02 am
You may be able to use these expenses to reduce the cost base and thereby CGT>
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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