I have question for a tax savvy person:
2 years ago my wife and I bought a block of land and built our PPOR which we moved into in Feb 2008. At the time of building we were limited in our budget and now find that the house is not really suitable for us as a long term home. I now have a substantially higher income and we are about to exchange on a new block around the corner to build a larger and more suitable house as our home for the long term future.
Now to my question. When we sell our current PPOR to move into our new home will we have any tax liabilities? Our intention was to live in the house as our home and not to sell for a profit ,although we will make a profit upon sale. We will have lived in our house for over 12 months at the time we sell it.
Regards,
Mat.
As it is your PPOR it is generally exempt from cgt – the only thing you need to watch is whether there is a limit on the time between purchase and moving in which may trigger some cgt liability.
Thanks Scott. I have found out that there is a 6 month window where I can claim main residence exemption on both properties and after that I need to decide with one to place the exemption on. Since the new build is going to be long term I will use my current residence for the exemption and therefore not have any CGT liability on it. When I sell the new property in the future there will be a small CGT liability upon sale but if we live there for 10 years then it will only be about 2.5%.
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