All Topics / Legal & Accounting / CGT exemption for main residence

Viewing 8 posts - 1 through 8 (of 8 total)
  • Profile photo of LindsayLindsay
    Participant
    @ken-lindsay8
    Join Date: 2015
    Post Count: 4

    hi all,
    I purchased two apartments(they’re not too far away from each other) off-the-plan a couple of years ago and would like to ask a quick question about CGT exemption.

    The first apartment will settle in a month and the second one will settle next year. Both apartments have appreciated quite a lot in value based on current market value.

    If I move into the first apartment right after settlement (and renting out my current place and make it my investment property) and treat it as my main residence, then move into the second apartment when it settles and sell the first apartment at the same time, would i be able to get CGT exemption on the first apartment, even though I have only lived there for a few months? (of course I’ll actually live there, change address on driver’s license, open new utility accounts etc)

    Anything in particular I need to pay attention to?

    Your help would be much appreciated!
    Ken

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

    No, because there would be some overlapping of owership period – so only one could be the main residence at any one time.

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

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of LindsayLindsay
    Participant
    @ken-lindsay8
    Join Date: 2015
    Post Count: 4

    Thanks Terry but to be honest I’m a bit confused…

    These two properties won’t settle at the same time. the 2nd property will settle between 6-9 months after the 1st one settles. Any particular reason for the possibility of ownership period overlapping? Maybe I’m missing something?

    Much appreciated!

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

    for CGT event such as this it is the contract date that is important, not the settlement date.

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

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of LindsayLindsay
    Participant
    @ken-lindsay8
    Join Date: 2015
    Post Count: 4

    Hi Terry
    Would you be kind enough to elaborate a bit more?

    what did you exactly mean? Let’s say I signed the contract 2 years ago…why is that more important than the settlement date? I don’t understand…

    thanks again!

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

    contract date is considered the date you become owner for CGT purposes.

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

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of LindsayLindsay
    Participant
    @ken-lindsay8
    Join Date: 2015
    Post Count: 4

    I see where you come from now Terry, thanks!

    In my case, I didn’t sign the 2 contracts on the same day. Actually I signed the contract for the second off-the-plan property roughly about 1 year after signing for the first property. What implication would that have to my situation?

    thanks again!

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

    over lap period – cannot count 2 residences at the same time.

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

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

Viewing 8 posts - 1 through 8 (of 8 total)

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