How long do you have to have a building as a PPOR to escape paying CGT? I have had many varying opinions from 1 day to 3 months to 12 months.
Does anyone know the correct answer?
Cheers
There is no amount of time listed in legislation. Do a search on the ATO site and look for “CGT Determination Number 51. Capital Gains: What factors are taken into account in determining whether or not a dwelling is a taxpayer’s sole or principal residence?”
This may help.
Terryw
Discover Home Loans
Mortgage Broker
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
Hi have checked this already with ATO rules and other active investors. It is one day. You can manage to do this only a couple of times ie you dont like neighbourhood,bad design on the kitchen, unhappy in general with end result. Your PPOR is specific if it is your only house. The rules become more diverse if say you have a holiday house.
k
I had a read through the ATO documentation on CGT, and it is so difficult to understand!
There are so many scenarios around how you may or may not be exempt from CGT.
I thought my case was fairly simple in that I bought a place, rented it out for 8 months, and then have lived in it for the last 3 years.
I thought that I would be exempt from CGT, but the ATO indicates that if the property at any time was used to produce income, then you need to pay CGT when you sell (at least partly). Determining how much CGT I will need to pay is quite difficult (or is it just me?).
Hi Chockey,
Read page 52 of the CGT guide in the bottom corner there is an example of how to work your gains out.
In a nutshell the total gain is multiplied by the number of days it was rented and divided by the total length of time the property was owned.
Eh $100000 gain – rented for 60 days – owned for 300
100000 X 60/300 = $20000 taxable gain.
The $20K is added to your other taxable income and taxed at the appropriate rate – which is why selling assets should preferrably be undertaken in no/low income years.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958
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