2.25% sales Tax in NSW

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petebell
Member
@petebell
Join Date: 2004
Post Count: 38
November 1, 2004 - 2:04 am
Scenerio:
I have a property in NSW that I purchased in 2000 as my PPoR. I moved out in 2003 and it has been rented ever since. I have not bought another PPoR and I beleive that the capital gain on the property is not subject to CGT as it is still technically my PPoR. Question is, if I sell it while it is rented out, will it attract the 2.25% sales tax on investment properties. If it does, should I move back in for a while and then sell it? All thoughts/suggestions/opinions welcome
Thanks
Pete
shaunwalker
Member
@shaunwalker
Join Date: 2003
Post Count: 403
November 1, 2004 - 4:51 am
i understand your frustation at this.
i did the same thing with a nsw property.
from what i understand, you have six years until its considered an investment property again.
i’ve read through all the land tax from the government and still cant find a definent answer to the question.
i even went to the accountant and he cant answer it. as far as he’s concerned i’m not up for the tax, but i wouldnt assume that for one second.
sorry its not much help
cheers
shaun
Lead, Follow or get out of the bloody way
Derek
Member
@derek
Join Date: 2004
Post Count: 3,544
November 1, 2004 - 11:13 am
Hi Petebell,
Based on information you have provided you are exempt from paying vendor duty.
See middle column on second page of this
http://www.osr.nsw.gov.au/pls/portal/docs/page/downloads/other/vendor_duty_factsheet.pdf
It would appear that the NSW OSR are largely relying on ATO’s definition of PPOR.
Derek
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Misty1
Member
@misty1
Join Date: 2004
Post Count: 348
November 2, 2004 - 1:41 pm
can someone tell me,pls:
How can one NOT be up for CGT,if it has been rented out during the period it was claimed as one’s ppor? Surely claiming it as a rental during this period renders it as an IP,& therefore would be subject to CGT? I have heard conflicting opinions from 2 accountants on this.Pls help!
tonyy21692
Member
@tonyy21692
Join Date: 2003
Post Count: 128
November 2, 2004 - 2:06 pm
hi Misty1
When Paul Keating was treasurer he brought in a CGT exemption on your PPR, often called the “6 yr rule”.
It works like this, if you move out of your PPR because say your employer asked you to work interstate for a couple of years and during that time your rented your home and did not have another PPR ie you rented, you can later sell your PPR and not be up for CGT on any gain. During the time it is rented you have to declare the income and pay tax on the profit or get a refund on the loss.
Regards
Tony