All Topics / Legal & Accounting / 6 Year Rule CGT

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  • Profile photo of flashflash
    Join Date: 2003
    Post Count: 140

    hi I'm contemplating selling what used to be our PPOR.

    Purchased in 1997 for $92000.
    Rented out since 2003,valuation at the time was $230000.
    Today valuation is at $280000.

    Bought new PPOR over 6 months ago.

    Would CGT be only payable on the difference of 230 and 280 while it was rented out or is CGT only worked out
    since we bought a new PPOR 6 months ago?


    Profile photo of elkamelkam
    Join Date: 2006
    Post Count: 722

    Hello Flash

    I believe you would only be up for CGT for the difference in price for the last 6 months. I also think that you can still decide to treat your old PPOR as your current PPOR and not pay any CGT at this point. Naturally this will mean that you will be up for CGT on the increase in value in the first 6 months of your new PPOR when/if you sell this.

    Things to consider would be which property has gone up more in the last 6 months and how long do you intend to live in your new PPOR. 

    Maybe you should discuss all this with your accountant before you do anything else.


    Profile photo of TerrywTerryw
    Join Date: 2001
    Post Count: 16,213

    I agree with Elka

    I believe that you may be able to elect to treat this place as you main residence under s118-145 of the ITAA.

    You can only have one main residence at a time (except for moving between houses, s118-140 = doesn't apply in your case I think).

    you could sell the old home without paying CGT, but you would then be up for CGT on the first 6 months on ownership of the new one.

    So you will be liable for CGT on either of the properties for the period over the last 6 months – chose the one with the least growth.

    I am no an accountantt

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide)

    Profile photo of flashflash
    Join Date: 2003
    Post Count: 140

    Both Terry and Elka you are exactly right.
    checked with Julia of Ban Tacs accountants.
    Thanks for the replies

Viewing 4 posts - 1 through 4 (of 4 total)

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