Another question about CGT

Discussion in 'Accounting & Tax' started by Anthony448, 13th May, 2017.

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  1. Anthony448

    Anthony448 New Member

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    Hello all.

    Thank you in advance for your help.

    I have a question about CGT. We purchased property 1 in 2009. We lived there until 2013 at which point we purchased another property to live in and rented out property 1. Upon moving I got a valuation done on property 1.

    I was wondering if I now sold property 2 and for cgt called it my primary residence. Could I return to property 1 making it my primary residence again, get another valuation and when the time comes would I only have to pay CGT on the difference in two valuations?

    Also how long would I have to move back into property 1 to start the 6 year rule. (we plan on only moving there for the shortest possible period).

    Thanks again, Anthony
     
    Anthony448, 13th May, 2017
    #1
  2. Terry_w

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

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    Not if you claimed property 2 as the main resident. It be like moving into a. Investment so worked out on a time.e basis with cost base being reset to Val at date u moved out.
     
    Terry_w, 13th May, 2017
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  3. Anthony448

    Anthony448 New Member

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    Thanks for the reply. I understand I can't count it as my ppor but if I return to live there and it then becomes my ppor. Do I only pay tax on the gain for the period it was rented?
     
    Anthony448, 15th May, 2017
    #3
  4. Terry_w

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

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    You can claim it as the main residence for part of the period.
     
    Terry_w, 15th May, 2017
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  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Thats a behaviour to avoid. You must intend to reside in the property or the main residence rule isnt triggered. Its not a "move in for a night exemption"....Provided you (the family and all possessions) wholly move in and occupy it then you can later move out and the 6 years rule applies. Some people have specific reasons (ie job interstate) but there is no need for a reason but ATO can query short periods and seek strong evidence. No evidence = no 6 years exempt. If you dont have sound reasons a short period could be denied and then you have to prove the ATO wrong with evidence. So ensure you keep evidence !! Moving costs, reset addresses, bills for services etc etc

    No valuation can be used as the s118-192 costbase reset you did on 2013 is a once and only. You would use a pro-rata based on days....Starting at the 2013 date. Using the 2013 market valuation (not when it was acquired)
     
    Paul@PAS, 15th May, 2017
    #5