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
LouiHe 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 Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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