Hi. I know the answer is here on the forum somewhere but am unable to find it. Can anyone please clarify how long you have to live in your PPOR to establish residency. I am told definately 6 months but I thought I had read this was incorrect and you only had to establish residency i.e power bill, phone etc. I am unable to actually find it written anywhere but am asking in regards to selling your PPOR within the first 12 months of owning it. Can you sell within six months and still be CGT free, I would have thought so but my old school father definately disagrees.
How also does this apply to PPOR that you rented out for 4 years but owned it for 10 before that. To establish residency I thought that you only needed to move in, get power etc on and that was that. You could then move out and rent it out for another 6 years, but again old school dad insists you would have to live in it for six months.
I am unable to produce anything to back up my arguement, however I may be wrong totally as well. Would appreciate any advice!
Thanks, sunshine
I may be wrong but..
with the 4 years rented but lived in it for 10 years prior – it was always my understanding that they aportion the CGT.
As for the 6 or 12 months – dunno ( dumb look on his face)
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
Thanks Redwing. I understand that CGT is applied for the time it is rented. I have been looking at various other posts which cover PPOR and then decided I should redefine my question…
Is there a minumum time frame you have to live in a property for it to be your PPOR?
i.e.
could I live in it for only 1 month and then sell it?
Thanks.
If you live in it for a day and have no other PPOR
it would be your PPOR at that time.
But why the question. If you sell it you have to apportion your CGT over the time lived and and rented.If you occupy it from purchase as a PPOR then you have CGT exemption for that time and any periods of up to 6 consecutive years of renting. As long as another PPOR has not been established in this time.
Check for yourself with the ATO.
cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Agree with Simon. I think people are getting ‘funny’ about time frames now because of the FHOG. It appears that the new ‘rule’ will be that you must occupy the PPOR for 6 months to keep/gain the FHOG.
As for CGT, I didn’t believe that there was a minimum time to be eligible for exemption. However, if you do it several times in several years you might have ‘some splaining to do’.
Cheers
MelThere is a Tax Determination available from that ATO that details what is a Principle Residence.
“TD51. Capital Gains: What Factors are Taken into account in determining whether or not a dwelling is a taxpayer’s sole or principle residence.”
Do a search in the legal database on http://www.ato.gov.au.
Terryw
Discover Home Loans
North Sydney
[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
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