Just wondering how capital gains tax is calculated when you have been renting a house since purchased 12 months ago and now I will be moving into it as my ppor and renovating to improve value and then selling?
Hi Keiko
It might be a good idea to get it valued or at least an estimation in value at the time you move in, as this allows you work out what the cost base was at the time it changed into your PPOR and will be important for determining & apportioning any capital gain at sale time.
To say what I mean more quantitatively, any capital gain while it was an IP will not be exempted by the PPOR rules. Hence the estimated value is needed to determine how much capital gain has occured at each stage.
James
Thanks, do you think a pricefinder or rpdata online valuation would do the job
If you are moving from IP to PPOR, the capital gains tax is calculated on a 'percentage of time' basis. For example, if it was an IP for 1 year, then PPOR fro 4 years, then sold, you would pay CGT on 20% of the gain. (As it was an IP for 1/5th of the time of ownership.)
You only need a valuation if you go from PPOR to IP, not the other way around.
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