Can avoid paying capital gains on a house I rent out if I don’t have another place to live that i own ? Someone mentioned a 6 year rule ?
You have 6 years from when you leave it to retain the CGT exemption.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
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.
So I have 6 years from when I buy the property or when i start living in it ?? If I buy a second house but live in that either am I then liable ?
I don’t understand sorry Can you explain ?
Say you buy one property 01/01/01 and live in it for 1 year, move out and rent it. you have up to 31/12/07 to move back in to get GCT exempt.
Warm Regards
ChanDollars
[Keep going, you’re on your way to Frolic Freedom!]What if only had it vacant for one week before I rented it ?
Six years is from when you move out and start renting it out.
If you buy another place to live in then you have to change the exemption to the new one.
The exception is if you sell the original one then they can overlap for up to 6 months.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
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.
But what if I didn’t live there and was livingin a 1 bedroom rental unit whilst I rented my house out ?
You need to live in it to establish it as your home.
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
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.
There is SOOOO much to learn isnt there. Well for me anyway, lol. Ah thats the whole fun.
Ok i was doing fine with all that until the purchase of the new place. So i am just about to start to rent out my home which i have lived in for the last 2 years. so if i chose to move back in 3 and then sell i pay NO CGT? Now however, im buying a new place to live in. SO i think from what you have said that now i cant avoid the CGT on my previous home no matter when i sell it? However the 6 yr rule is now on my new home?
Sorry if im not clear. I think that went ok.
Cheers
You must live in the house first – although maybe not (would need to research though).
When you move out I would definitely get a valuation done, for your recors, and as you may need it down the track when you do sell.
You then have 6 years to either move back in, or to lose the exemption from the CGT. If you buy another house which you live in, you need to make the decision as to which will be your PPOR for CGT purposes. You do not have to make this declaration until you actually sell one of the properties. Remember, you can’t have two at once (except for the 6 months Simon mentioned, but that is only on changeover of houses), so when you choose, that will mean the other will be liable for CGT.
Cheers
Melok now i understand fully, Thank you for that.
Cheers
How long must you live in a place for it to be cosidered your primary place of residence?
Are there any other criteria?Cheers
Darren
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