6 year rule / moving into my investment property

Discussion in 'Accounting & Tax' started by salutsalut, 8th Mar, 2020.

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  1. salutsalut

    salutsalut New Member

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    Hi all,

    We purchased an investment property in Brisbane in 2018 while living in Sydney. It has been rented out ever since. Now we are considering moving into the property as we will be relocating to Brisbane later in the year.

    If we live in this property for over a year, will we be able to benefit from the 6 year rule (although it was rented out before we moved in)?

    Any other tips / considerations we should know about?

    Thanks so much!
     
  2. Trainee

    Trainee Well-Known Member

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    Depends on what you think the 6 year rule will do.
     
  3. Mike A

    Mike A Accountant Business Member

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    willair likes this.
  4. Ross Forrester

    Ross Forrester Well-Known Member

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    If you move into it and then rent it: you could then benefit.
     
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  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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  6. Mike A

    Mike A Accountant Business Member

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    consider all your third element costs as well to reduce any potential capital gain on sale
     
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  7. FredBear

    FredBear Well-Known Member

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    Your initial period of rental will never be CGT free.
    However once you move in any expenses while living there can be used to increase the cost base.
    So I would:
    1. get a valuation for the day you move in.
    2. keep track of every expense. Invest in a fast scanner, and keep a running spreadsheet. It's much easier to do this as you go along rather than try to piece the information together later.
    Scan every receipt, and save it with a running ID number in the file name. Enter the information on the spreadsheet, the first column being the ID number, then date, amount, vendor and description.
    Some thing like this:
    1 10/3/2020 $15.00 Bunnings Doorbell
    2 11/3/2020 $75.00 Spotlight Roller blind
    3 14/3/2020 $250.00 ABC Aircon service
    Over the years it is surprising how these 3rd element costs add up - reducing your CGT all the time.
     
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Fred not valuation needed is moving in, s 118-185. A val is only needed when the property first becomes income producing, s118-192.
     
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  9. FredBear

    FredBear Well-Known Member

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    Yes Terry you are of course correct - I just have valuations on my brain at the moment:)
     
    Last edited: 10th Mar, 2020
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