Join our investing community

Property Renovators - Main Residence Exemption - Any suggestions to make it go faster?

Discussion in 'Investing Strategies' started by Adam2019, 12th Feb, 2019.

  1. Adam2019

    Adam2019 New Member

    12th Feb, 2019
    Dear Fellow Members,

    I heard from a friend that is using this strategy.

    Buy, renovate, live in for about 2-3 years then sell then repeat.

    So the brownies here are the main residence exemption provided that one only owns this property that he/she lives in.

    It might be great starting off or when things are booming and when things are not or given the 2-3 year rinse and repeat there any other things to make it turbo charge or otherwise it is really like a salary job cap at X and no one really knows if it will sell after that period or how long it would take (whether the waiting time would be worth it or would just crush further investing down the track).

    This friend doesn't have much going on normal work/job wise so during this 2-3 years live-in plus the waiting time for it to sell and settle is quite resourcefully draining/with a outcome that is hard to know for sure...any suggestions for turbo charging the cycle (to allow for more rounds) or getting some funds to help better sustain/survive the cycle process? (so that there is something to be gained at the end of the cycle)

    Your suggestions are much appreciated.


    twisted strategies likes this.
  2. Hodor

    Hodor Well-Known Member

    17th Sep, 2016
    You could renovated the property faster to sell it quicker.
    Not sure why your friend is using the 2-3 years as this isn't part of the test for CGT exemption

    Your main residence

    They might be using an extended time frame due to the below
    "The length of time you stay there and your intention in occupying it may also be relevant."

    If you are looking at making serious money you want to be building an asset base and letting your gains compound, ie renovate and use the equity to borrow and get a second property, third etc. no need to sell. obviously you will be taking on significant debt and need the rising tide to continue.

    Flipping (which is what you are suggesting) is working for income, you either do the renos yourself or are the project manager plus you are taking on all the risk.
  3. Terryw

    Terryw Well-Known Member

    9th Jun, 2006
    It is a great strategy but it could still be taxed as the main residence exemption doesn't apply to revenue account. If they are doing this with the intention of making money it could be considered trading stock or an isolated transaction. Might get away with a few though as it might look like a simple sale of a main residence.