I have a question about CGT, if you live in a house for 3 years and then decide to move out and rent it out for 2 years do I pay GCT from the 5 Years or the start of the time the place has been rented out for so being 2 years?
Also how is CGT calculated?
In this situation the CGT could be totally exempt. Under the main residence absence rule. s118-145 ITAA 1997.
It would depend on your circumstances though.ducksterParticipant@ducksterJoin Date: 2004Post Count: 1,674
Be careful as you can only claim one property at a time as your main residence. So if you moved into another house but deemed to treat the original house as your main residence s118-145 iTAA 1997 you cannot as they coin it double dip by trying also to claim house number two as a main residence.
http://www.ato.gov.au/corporate/content.aspx?doc=/content/86191.htmducksterParticipant@ducksterJoin Date: 2004Post Count: 1,674ORSM wrote:Also how is CGT calculated?
it is complicated to explain. joint ownership you split the capital gain 50% each owner
>12 months ownership from contact dates not settlement dates then another 50% discount
Then cost base has to be considered to subtract from the final profit
But you can't double dip on this soas an example if you rented and claimed interest costs against rent each year then you can't claim interest costs as a holding cost on cost base.
what ever is left is added to your margin tax income to calculate what tax you will pay.TalismansParticipant@talismansJoin Date: 2010Post Count: 23
After you move out of the PPOR and want to rent out the property, do you still need to direct all mails to the address to use the 6 years CGT exemption rule?
The section in the tax act, s118-145 ITAA, allows you to be legitimately absent from your property and legitmately renting it out. No need to have the mail go there if you don't live there.
I have owned a unit for 6 years, bought it for 267k. According to rpdata.com, it’s automated value is 320k. So the gain is 53k. So how much tax is payable or I can get away from paying the CGT by following the act above.
You should see your accountant as it is possible you may pay no tax.
But assuming the absence rule doesn’t apply, then it is worked out roughly like this:
Sale price – Purchase price less costs of buying/selling (stamp duty, agents fees, legals etc) plus any depreciation claimed.
$320,000 – 267,000 = $53,000 less costs, say $15,000 plus depreciation claimed, say $5,000 = $43,000
As you have held it more than 12 months you will get the 50% discount, so this is reduced to $21,500
This is added to your other income, so the max tax you would pay would be around half = $11,000 apprx
Very rough figures though.