We are currently building a granny flat on our PPOR. We plan to live in both the granny flat and the house for a period of time. If we then rent out the granny flat are we CGT exempt for the next 6 years? We plan to do a series of renovations over a long period of time to the main house, thereby changing the value of the property at several points in time. What are the implications of this and what records of valuations do we need to get at the different stages of the renovation process depending on whether we are or aren’t exempt for that 6 years?
Cheers
RebeccaYou can’t use the 6 year rule in this situation as you are not absent from the whole property.
The cost base of the main residence could be reset at market value when the GF is first income producing and you would then need to apportion based on area.
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
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