Is there someone (preferably with accounting/taxation background) out there who can advise on CGT in the following situation:
I'll be moving out of my own house (only prime residence) to live in my daughter/son-in-law's house, for about 2 years, as they'll be overseas. I intend to rent out my own house during this period. Just before they return to Australia, I intend to sell my house and use the money to buy a smaller house and move into it. Do I have to pay CGT on my (first) house?Jlee
No, as you will still qualify for the main residence exemption, for up to 6 years.
I am not qualified to answer this … however.
I understand that the CGT exemption can be applied for the period you owned the house.
So , if you have owned it for 8 years and then rented it out for 2 years.
You would have an exemption for approx. 80% of the capital gain you made, depending on the CPI for this period.
Thanks, Dan42. But do I qualify for 100% CGT exemption (when I sell my property) or only partial?
Dan42 wrote:No, as you will still qualify for the main residence exemption, for up to 6 years.Hi lifeX, I've also heard the same (as mentioned by you). On the other hand, I've also heard that I could perhaps get 100% exemption as long as I don't claim any other property as my main residence during the period that my house is rented out. This is so confusing!
lifeX wrote:I am not qualified to answer this … however.I understand that the CGT exemption can be applied for the period you owned the house.
So , if you have owned it for 8 years and then rented it out for 2 years.
You would have an exemption for approx. 80% of the capital gain you made, depending on the CPI for this period.
In your situation, you will qualify for the 100% main residence exemption, if it is sold in 2 years as you plan, because:
– Your house was your main residence before you moved out.
– You are not buying another main residence (you are moving into your daughter's house)
– You are planning on selling in less than six years.Dan
Dan42,
Is there a requirement for Jlee to actually move back into house before selling ?? You always here the saying that you can move out for up to 6 years and then move back in to not pay CGT.No, you don't have to move back in. The law says as long as it was your main residence before you moved out, you have up to 6 years to continue treating it as your main residence even though you are renting the property out, provided that you don't own another main residence elsewhere.
Eddie
[email protected]WJ,
There is no requirement to move back in to the house in this situation.
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