Hello,
If I sell my IP but I have never lived in it, is there anything I can do to demonstrate that I “lived” in the property within the 6 year window so I don’t have to pay CGT?
Asking for a friend
Thanks
Bobby
Your friend can show that he lived there if he has some proofs such as records of home improvements or any bill payment receipts in case he used the property for rentals. But I think you should consult an industry professional before you demonstrate any proof. I know some real estate experts, one of them is Naval Aulakh. He’ll be the best person who can help you with your problem. Hope this helped!
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This reply was modified 3 years, 11 months ago by
Ricky.
Ricky | Naval Aulakh Real Estate Agent
https://navalaulakh.com.au/Buying property through SMSF must help
If you sell a property held within a SMSF once you retire and are in pension stage, you won’t pay capital gains on the property
Your friend can show that he lived there if he has some proofs such as records
Not too sure if this is an ethical thing to do, but having said that, I know a few people who have done it:
1. They continue to live with parents even after they bought a property
2. Then they negotiate with tenants that they would charge a slightly higher rent (eg: $320 per week rather than $300 per week) but the rent would include all utilities, and they proceed to connect water/power/gas in their own names. They also purposely ask banks to send statements, letters, etc… to that property instead of where they are actually living.
Now they have all the “evidence” that they live in that house.
Hello, If I sell my IP but I have never lived in it, is there anything I can do to demonstrate that I “lived” in the property within the 6 year window so I don’t have to pay CGT? Asking for a friend Thanks Bobby
No.
The requirement is not ‘live’ but reside in it as your main residence.
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
I know some real estate experts, one of them is Naval Aulakh. He’ll be the best person who can help you with your problem. Hope this helped!
Are you implying that the op should go to a real estate agent for tax advice?
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
<div class=”d4p-bbt-quote-title”>ricky1990 wrote:</div>
Your friend can show that he lived there if he has some proofs such as recordsstatements, letters, etc… to that property instead of where they are actually living. Now they have all the “evidence” that they live in that house.
The ATO searches the rental bond register too – which would be evidence the house is rented out so the full main residence exemption would be llost – and you cannot use the 6 year rule when still living there and renting out part of the property
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
The ATO searches the rental bond register too
I have also seen many people simply not advertise their house for rental and instead rely on world of mouth for referral, and they are rented to overseas students who simply make payments to landlords without doing the bond register or what not.
I have in the past seen friend’s friend doing it, they post some kind of “bulletin” near train stations or on power poles, and receive large number of overseas students interested in renting, and then payment is just made directly between the landlord and the students. Full on tax evasion.
Personally I don’t like doing it, as I consider this to be unethical, but I have seen enough people doing it.
Fantastic advice and food for thought thanks for all your responses!
I am a lawyer so couldn’t advocate lying to the ATO.
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
couldn’t advocate
I think moderate may want to consider deleting this thread.
It should be ok to stand I think. Many people seem to have these thoughts!
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
Yeah, if I’m reading the post right, and you are asking how you can prove you lived in a house as a home when you didn’t, then I’m totally uncomfortable making a declaration that you know to be false. That’s straight tax-avoidance. Also gaining a financial advantage by deception. Just pay the tax and give thanks you live in a country like Australia where your contribution goes to making us what we are.
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
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This reply was modified 3 years, 11 months ago by
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