Hi all,
Can anyone help with these questions? [confused2]
1. Is it true that if you live an a property for 12 months as a PPOR and sell within 5 years you avoid paying capital gains tax?
2. If you live in PPOR and renovate, then rent the property out can you claim the renovation back on tax or do you need to have a tenant in place first BEFORE renovating?
3. We read in Robert Kiyosaki’s book that he avoids paying capital gains tax by rolling his profits through a “1031 exchange” into a more expensive property, is there an Australian equivilant to this process?
Any help on these questions greatly appreciated.
[hmm]
ThanksK&R
The only thing that limits us…is a limiting belief.
1. yes and no
2. yes but depends on time frame
3. no
in australia we minimise tax not avoid it, in america one day you will pay, its just a matter of when.
Originally posted by resiwealth:1. yes and no
2. yes but depends on time frame
interesting if cryptic answers. Can you elaborate on this pls?
The only thing that limits us…is a limiting belief.
1. If your main residence is rented out, after you first live in it, and sell it wihtin 6 years of renting it, and have no other main residence, then it may be CGT free. There is no requirement to live in it for 12 months first.
2. You can claim building allowance on any improvements and depreciaiton on any fixtures for a property you rent out.
3. Not in Australia.
Terryw
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[email protected]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
Thanks Terry
Helps us out with our plans.
K&R
The only thing that limits us…is a limiting belief.
To rent your property out for up to 6 years without CGT applying upon its sale you would have to not only have no other main residence but there would need to be a reason why you are renting out your main residence. For example you have moved from Melbourne to Sydney or overseas for for work reasons and cannot then live in your main residence.
I was under the impresion that CGT was now calculated over a 7 year period?
eg. you were no longer entilited to an exemption for 12mths occupancy as PPoR.
hmm.. I’m trying to find it on the ATO site now [blink]
sorry guy’s… the ATO’s site isn’t the easiest to get arround (maybe it’s more because of the content…?)
May be a point mentioning to your account though?
You may be want to read this book from Anita Bell on your inveatment property she explained all these questions very simply.Very good book.
Cheers
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