Curious if 6yr ppor/cgt rule would apply...

Viewing 6 posts - 1 through 6 (of 6 total)

Misty1
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@misty1
Join Date: 2004
Post Count: 348
June 20, 2004 - 8:15 am
Any advice on whether (or how to make it) my situaiton would/could relieve me of cgt if i sell.
If i had vacant land with a transportable, used as i.p. for 2yrs, then land was vacant for 1yr while building (for i.p) ,then rented out for 1yr after completed…(this gives total of 4yrs as i.p)
Is there any way the rule of not paying cgt would apply if i moved in,& then sold it? If so,when should i move in,& how long would i have to stay?[confused2]
Misty1
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@misty1
Join Date: 2004
Post Count: 348
June 20, 2004 - 8:20 am
As an after thought….
What about scenario #2:
If a prop. is partly i.p. (ie I live there & part rent it out), how would 6yr rule apply there??
(eg, if i wanted to sell, & it had been 2/3rd’s i.p. for 3 yrs. Then i lived in it on my own for a while, then sold,would i still be up for cgt? Or any ideas how to get around the cgt?)
Misty1
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@misty1
Join Date: 2004
Post Count: 348
June 20, 2004 - 8:35 am
On both?? I kinda thought if u lived in a property within 6yrs, for 1yr (?) as your ppor, that it would be cgt free if you sold it??[confused2]
Monopoly
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@monopoly
Join Date: 2004
Post Count: 1,612
June 20, 2004 - 9:58 am
Misty1,
Rob is correct, the CGT would be apportioned.
CGT would be applicable as the property (albeit your home) was used as a means of making income, whether this is by rent or home office, making money is making money as far as the tax dept sees it!!! The fact that you lived there yourself, means that CGT would not be calculated at the FULL rate as it otherwise would have.
As for the 6 year CGT exemption, you have 6 years from the time this period starts (i.e. the time you actually move out) but that is not applicable in your case, as you did not move out. What you in effect did, was use part of your home to generate income, and as such you will be taxed for the period of time in which it generated same.
Furthermore, as I said in another post, when it comes to tax or legal matters, by all means ask people in here as they can be extremely helpful, but in the end, please seek proper professional advice!!
Cheers,
Jo
JenD
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@jend
Join Date: 2004
Post Count: 33
June 21, 2004 - 5:26 am
I’m curious, what is the 6 year CGT exemption – is that only for ppor?
Cheers,
JenD
Monopoly
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@monopoly
Join Date: 2004
Post Count: 1,612
June 21, 2004 - 5:37 am
Hi JenD,
As far as I know, the CGT exemption is for PPORs that have been turned into revenue-generating IPs once the owner-occupier has moved out, and he/she has 6 years in which to sell the property without incurring a CGT bill, provided they don’t purchase another PPOR in the meantime, in which case, they have only a 6 month grace period.
Cheers,
Jo