All Topics / Help Needed! / CGT 6 year rule

Viewing 5 posts - 1 through 5 (of 5 total)
  • Profile photo of jasedc5rjasedc5r
    Participant
    @jasedc5r
    Join Date: 2011
    Post Count: 30

    Hi All,

    I was wondering if I would be eligible for the CGT exemption 6 year rule?

    My current situation is I’m selling one of my properties which I lived in for over a year when first purchased. I’m selling the property with tenants and the property is leased for 5 years.

    During the period I bought another IP with my brother. I am currently living at home with parents and property 1 would be the only one classed as my PPOR.

    Thanks

    • This topic was modified 7 years, 10 months ago by Profile photo of jasedc5r jasedc5r.
    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Yes possibly.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of BuyersAgentBuyersAgent
    Participant
    @knightm
    Join Date: 2005
    Post Count: 338

    On the face of it from your post it sounds like it should be. Check with someone wise in accounting and finance/law. The man above is one of the very best.

    Hi All,

    I was wondering if I would be eligible for the CGT exemption 6 year rule?

    My current situation is I’m selling one of my properties which I lived in for over a year when first purchased. I’m selling the property with tenants and the property is leased for 5 years.

    During the period I bought another IP with my brother. I am currently living at home with parents and property 1 would be the only one classed as my PPOR.

    Thanks

    BuyersAgent | Precium
    http://www.precium.com.au
    Email Me | Phone Me

    South Coast NSW Independent Buyers Agent - Wollongong to Batemans Bay and Regional NSW. DOWNLOAD OUR FREE 14 POINT PROPERTY BUYER'S CHEATSHEET to avoid painful mistakes at precium.com.au

    Profile photo of Adam SweenyAdam Sweeny
    Participant
    @asweeny
    Join Date: 2014
    Post Count: 12

    My understanding is that the 6 years are cumulative between multiple properties, so if you’ve had the other IP for more than 1 year then CGT would start to be accumulated. BUT it would only be for the proportion of time that it exceeds the 6 years, so this when combined with your 50% discount should be a relatively small amount.

    Have you spoken to an accountant yet? Interested to hear what they say.

    Regards
    Adam

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

    Not sure what Adam is saying here, but you only get one main residence exemption at any one time, but you could have a potential exemption between 2 or more properties if both had been the main residence. The election to claim one as the main residence is only made in the tax return of the year of sale.

    jasedc5r’s property would probably be totally exempt from CGT if it was the main residence from the date of settlement and he has been absent for less than 6 years and it is less than 2 hectares in size and it was not used to produce income while living there. Having 1 or more other properties won’t effect this.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

Viewing 5 posts - 1 through 5 (of 5 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.