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need help with principal place of residence

Discussion in 'Real Estate' started by kadedane, 23rd Oct, 2014.

  1. kadedane

    kadedane New Member

    Joined:
    23rd Oct, 2014
    Posts:
    2
    Location:
    central coast
    HI,
    WE are currently renting someones elses property next door to our block of land (we own) and have owned for 18mths.

    WE recently sold our other house to pay off land and rent while building.

    We havnt started building yet as we cant make up our mind on plans.

    in the mean time we have come across a house we want to buy and renovate and then sell.. but will live at this house most of the time. as its easier to renovate while living in it. and try to avoid CGT on this house.

    I am locked into the lease where we are now for 12 mths. and want to come back to this house when we start building. as convenience again is essential while building.

    we can afford to still pay the rent and buy this other house and renovate and sell.

    I cant find anywhere that talks about PPOR being a house owned by someone else and although we own the land it cant be a PPOR without a house and from what I can find we have 4 years to make it our PPOR ( I may be wrong)

    Frustrated that I cant find anything... please help
     
  2. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    653
    Location:
    Sydney
    Not sure what you are asking.

    If the property is owned by someone else then it is not your property!
     
  3. kadedane

    kadedane New Member

    Joined:
    23rd Oct, 2014
    Posts:
    2
    Location:
    central coast
    hi terry,
    what I am asking is legally am I allowed to have a lease on a property (being where we predominantly live) and owning the land but not ready to build and buy this other house in view to renovate and sell.

    We want to avoid GCT on this property. So effectively we will send all our mail to the house we buy and will stay at the premises but not all the time until its complete. Is there a time limit we need to own the property to avoid capital gains tax.. if its our PPOR.

    our accountant told us because we have a lease on a property this is our legal place of residence. and that we will need to pay CGT on the renovated property.
    but I cant find any info on our situation..
     
  4. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    653
    Location:
    Sydney
    Seek a second opinion.
     
  5. Investor23

    Investor23 Member

    Joined:
    21st Oct, 2014
    Posts:
    15
    Location:
    Adelaide, SA
    Now I'm not an accountant but I think if push came to shove you would need to have a pretty good explanation as to why you still have a lease elsewhere if you are trying to claim that other property as your PPOR. Definitely seek a second opinion.
     
  6. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    653
    Location:
    Sydney
    not the case
     
  7. Lightening

    Lightening New Member

    Joined:
    2nd Nov, 2014
    Posts:
    1
    Location:
    Sydney, NSW
    You don't any have principal place of residence now. If you buy the house, direct mails to that house, and move into it, you can nominate the house as your PPOR. You'd better live in it no less than 3 months every 12 months though.

    For CGT purpose, the land can be considered as your PPOR for up to 4 years.

    After you complete building the new house on the land, you move from the renovated house into the newly built house as soon as practical. Both residences can be treated as your PPOR for up to 6 months. During this 6 months, you can sell your renovated house free of CGT. After that, the newly built house will be your PPOR.