Forums / Getting Technical / Legal & Accounting / Capital gains or not?

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  • Profile photo of LouiLoui
    Participant
    @loui80
    Join Date: 2016
    Post Count: 13

    A close friend of mine, purchased a property on a 12 month terms contract and then has on sold it a month before needing to settle. The sale contract is effectively 11 months from receipt of funds. He is making quite a healthy profit on this and these sort of deals are unheard of these days.

    My questions is, how long does he need to live in it after settlement to claim the principle place of residence exemption? Is it 6 months? Also if he received the 10 per cent deposit monies now would it trigger a potential tax implication ? He thinks it will but I can’t get my head around it why it will.

    Looking forward to comments.

    Thanks
    Loui

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    He should seek specific tax advice.

    There is no minimum period legiislated to make a property the main residence. It is not 6 months. Receiving a deposit will not generally be a separate tax issue. It is generally the date of entering the contracts (but not always).

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

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

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