All Topics / Help Needed! / Avoid CGT?

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  • Profile photo of Robs132Robs132
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    @robs132
    Join Date: 2016
    Post Count: 4

    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

    Profile photo of ricky1990ricky1990
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    @ricky1990
    Join Date: 2020
    Post Count: 13

    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!

    • This reply was modified 2 weeks, 2 days ago by Profile photo of ricky1990 ricky1990.
    Profile photo of WalkerJonWalkerJon
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    @walkerjon
    Join Date: 2019
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    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

    Profile photo of StevenSteven
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    @steven1982
    Join Date: 2017
    Post Count: 189

    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.

     

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

    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://structuring.com.au/
    Email Me

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

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
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    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://structuring.com.au/
    Email Me

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

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
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    <div class=”d4p-bbt-quote-title”>ricky1990 wrote:</div>
    Your friend can show that he lived there if he has some proofs such as records

    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.

    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://structuring.com.au/
    Email Me

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

    Profile photo of StevenSteven
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    @steven1982
    Join Date: 2017
    Post Count: 189

    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.

    Profile photo of Robs132Robs132
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    @robs132
    Join Date: 2016
    Post Count: 4

    Fantastic advice and food for thought thanks for all your responses!

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
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    I am a lawyer so couldn’t advocate lying to the ATO.

    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 StevenSteven
    Participant
    @steven1982
    Join Date: 2017
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    couldn’t advocate

    I think moderate may want to consider deleting this thread.

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
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    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://structuring.com.au/
    Email Me

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

    Profile photo of Steve McKnightSteve McKnight
    Keymaster
    @stevemcknight
    Join Date: 2001
    Post Count: 1,763

    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.com

    Success comes from doing things differently

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