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CGT and PPOR Exemption

Discussion in 'Accounting, Tax & Legal' started by archangelsupreme, 30th Apr, 2008.

  1. archangelsupreme

    archangelsupreme Well-Known Member

    Joined:
    7th Sep, 2007
    Posts:
    206
    Location:
    Australia
    OK,

    If i've been claiming a residential property as a PPOR since i first bought it (let's just say 10 year)...then during 2007 rent it out until now.....will I be eligible for the full CGT Exemption if I sold it now (say 1 year span).

    Or will I have to pay CGT on the increase during that year...if so, how the hell do I determine the increase? what if its a decrease?

    I was under the impression that you can claim the entire exemption even if you've rented it out...so long as it's within 6 years (which in this case it is). Is this correct?

    What if during the time I rented out the property I claimed another property as a PPOR......will I still be able to claim the entire exemption from the original PPOR as it's within 6 years?

    Thansk.
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    Yes, correct - but only if you don't subsequently claim a new PPOR.

    No, you can only have one PPOR - the 6 year rule only applies if you didn't subsequently claim a new PPOR.

    In our case, we bought a PPOR, then moved interstate and rented - we continued to claim PPOR CGT exemption for a further 6 years on that property since we hadn't bought a new PPOR.

    If a property previously exempted from CGT subsequently becomes liable for CGT, you should have it valued at the time it changes status to determine your cost base for future CGT calculations. The ATO guide on capital gains tax might have more details about this.
     
  3. archangelsupreme

    archangelsupreme Well-Known Member

    Joined:
    7th Sep, 2007
    Posts:
    206
    Location:
    Australia
    So could I then reclaim that property as a PPOR, transfer bills accross and say live in there for a month....and then to commence the transfer latter....when that PPOR is cgt exempted?

    Then reclaim their current property as PPOR after the transfer?

    Thanks.