Forum Replies Created
Hi Benny,
This is assuming the property is your MPR (as is assumed in brackets at the end of my quote).
The only caveat being you cannot live in the property and rent out part of the property (ie a room), you must live in it solely.
If no longer than 6 years has elapsed since the time you moved out and the time you moved in again, you will not pay any capital gains (assuming the property is your MPR).
However if we are not assuming the property is his main primary residence, and he buys another house, he can only choose one property to be his main primary residence at any one time.
Hope this helps.
James Mav – accountant
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http://www.accountancymatters.com.auHi Property boy,
If you move in prior to the six year period ending, the six year exemption rule is effectively re-set and you will receive another six years from the time you have moved out.
In order to prove you moved in again ATO may ask for any of the following (with the address on each as the property in question):
-Drivers license
-Utilities
-Medicare/private health
-Voting registry
-Car registrations
-Insurances
-Mail redirection
-Bills etcThe only caveat being you cannot live in the property and rent out part of the property (ie a room), you must live in it solely.
If no longer than 6 years has elapsed since the time you moved out and the time you moved in again, you will not pay any capital gains (assuming the property is your MPR).
Hope this helps.
James Mav – accountant
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http://www.accountancymatters.com.auHi Manish,
1. If i sell it now – do I have pay CGT?
No, as long as you have moved in straight away.2. If NO – How long I can keep it as rental property without incurring CGT?
6 Years from the date it was rented outHope this helps.
________________________________________________________________________________________________________James Mav
http://www.accountancymatters.com.auHi Eric,
Terry is 100% correct.
You may choose 1 property to be your main primary residence.
This only applies when the property was rented out entirely i.e you will not be exempt for the period where you where living in the property AND rented out a room.
Cheers
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James Mav – Accountant
http://www.accountancymatters.com.auHi Flowergirl13,
Yes that is correct, you may still claim your investment property as you main primary residence for up to six years after you move out (if you move back in you will get another six years).
The only issue you must be aware of is the exemption doesn’t apply of you are living in your investment property AND rent out part of the property at the same time.
Since this is not the case you will have no problems with capital gains upon sale as long as you can prove to ATO you have lived in the property in the first instance (ie bills under your name, postal address etc).
Kind regards,
James Mav – Accountant
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http://www.accountancymatters.com.auHi Anthony,
Your broker is telling you a “half truth.”
Whilst new properties generally have higher levels of depreciation, older properties usually still have some depreciation left.
Buildings themselves depreciate at 2.5% p.a, and all the assets themselves depreciate at their “effective life” ie hot water heaters over 10 years etc.
This can help tax wise but what you are missing out on is the capital growth (ie by renovating the property it should (if done correctly) increase in value by more than the expenditure), also the rennovations themselves are depreciatable (as they are now new assets).
The other thing to be aware of is that off the plans usually offer very large commission to whoever sells them, which may be a large part of the reason your broker is pushing you towards an off the plan.
Hope this helps.
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James Mav | Accountancy Matters | Accountant
http://www.accountancymatters.com.auHi Mizfitz,
Depending on the age/value of your property it may or may not be worth hiring a quantity surveyor, generally speaking if your house is less than ten years old, it is almost always worth the cost (should be around $800) else it would depend on the individual situation.
The best way is to give your accountant the details of the property and they will be able to help you decide whether hiring a quantity surveyor will be worth the cost.
In regards to your fence, because you are replacing the entirety, it is considered a capital works deduction (Fences are not considered separate assets) and will be depreciated at 2.5% pa (should you choose to hire a quantity surveyor, they would include this in their calculations).
Hope this helps.
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James Mav
http://www.accountancymatters.com.au
