All Topics / Help Needed! / From owner-occupied to invest property

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  • Profile photo of clonesclones
    Participant
    @clones
    Join Date: 2005
    Post Count: 81
    July 28, 2005 - 2:38 am

    Hi All,

    I have the next question:

    1) If you own and live in a house and you sell it you do not pay CGT because it is your main place of residency.

    2) Now, if you buy and move to a second place, and the first property become an investment property and later you sell it how do you calculate the CGT impact?

    Eg.

    First House : Bought for $100.000
    Sell for $150.000

    Let’s assume that for case 2) when you moved out of the first place the valuation of the house was $150.000 already.

    Do you still have to pay for the $50.000 CGT difference considering that the house revalued that money when it was consider a place of residency and not when it was an investment property?

    Any idea?

    Regards,

    PG

    Profile photo of Kevin_3Kevin_3
    Member
    @kevin_3
    Join Date: 2003
    Post Count: 12
    July 28, 2005 - 6:14 am

    You need to get a valuation of the house when it changes from your home to an investment property. You then only pay GCT on any increase after that valuatio. Whatever it increased in value while it was your primary place of residence is not subject to CGT.

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