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CGT and new PPOR

Discussion in 'Accounting & Tax' started by Nemo, 13th Sep, 2015.

  1. Nemo

    Nemo Well-Known Member

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    I bought a house earlier in the year, with the intention that it would be an ip.

    I renovated it and now my intentions have changed and it will be my ppor. It has never been rented out.

    I'm looking to potentially sell my current ppor shortly. I'm just wondering about the status of my new ppor - as you can only nominate one as your ppor.

    Would the period that I've owned the new one be liable for cgt down the track if I eventually sell?

    I imagine this would happen a lot where people buy a new house before they sell the old one.

    Sorry if this is a stupid question and im just over complicating it.
     
  2. D.T.

    D.T. Adelaide Property Manager Business Member

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    You can have an overlap of ppor's. Six months I believe?
     
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  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    3 options
    1. claim original house as main residence for entire period
    2. claim new house as main residence since beginning of ownership
    3. claim both as long as sale happens within 6 months of purchase of second one.

    If 3 not possible work out if therre would be any CGT on the sale of the first one - possiblly not. Better to keep the new one totally exempt.

    Assuming you lived in the new one while renovating
     
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  4. Nemo

    Nemo Well-Known Member

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    Thanks DT and Terry, that helps a lot. I still have time to sell within the 6 months.
     
  5. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    You can only use the 6mth overlap where the new property was a PPOR from day one (as soon as practicable) AND the former house is contracted to sell within 6 months. If new PPOR was being renovated while you still lived in old PPOR then that wont work.
     
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  6. D.T.

    D.T. Adelaide Property Manager Business Member

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    Hi Paul

    By contracted, do you mean an offer accepted or offer gone to unconditional status?
     
  7. Nemo

    Nemo Well-Known Member

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    It's a little more complicated as I'm not currently living in either property, rather another ip which recently became vacant as a share house kind of arrangement. Old ppor is owned jointly and the other party will most likely buy me out.

    I've already moved my furniture to new ppor and I consider it my home. There was a period of about 2.5 months between buying and moving in. I should mention they are in different states, and I need a job to be able to move permanently.