CGT exception - how long before I need to move in?

Discussion in 'Accounting & Tax' started by jaybean, 19th Feb, 2021.

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  1. jaybean

    jaybean Well-Known Member

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    I’m renovating it right now. Problem is I’m short on cash so I’m doing a bit each time I get a burst of income (monthly). How long do I have to get it all done and move in?
     
  2. Terry_w

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

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    4 years potentially.
     
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  3. jaybean

    jaybean Well-Known Member

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    thank god. I’ve got nothing left after buying this place. I’ll need at least 18 months but for some reason I thought it might be just a few months. Thanks!
     
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  4. Paul@PAS

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

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    You can treat land as your main residence and the dwelling for up to four years before the dwelling becomes your main residence if you:
    • have an ownership interest in the land
    • build, repair or renovate a dwelling on the land (or finish a partly constructed dwelling), and
    • move into the dwelling as soon as practicable after it's finished and continue to use it as your main residence for at least three months.
    This also assumes no other dwelling you or your partner own is your home
     
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  5. jaybean

    jaybean Well-Known Member

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    Great thank you! I spent everything I had to buy this place so I’m going to need a decent amount of time to save up to renovate it. Good to know I have time on my side.
     
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  6. wylie

    wylie Moderator Staff Member

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    Where are you living while you renovate it?
     
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  7. jaybean

    jaybean Well-Known Member

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    Rental property (not mine). Is this going to be a problem? My new villa is only about 70-80sqm so there's really no room to live there while I renovate, especially given the scale of what I'm doing.
     
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  8. unicorntears

    unicorntears Well-Known Member

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    What sorta renos are you doing?
     
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  9. jaybean

    jaybean Well-Known Member

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    Tons, but here's the main stuff:
    • Full rising dampness treatment
    • Complete replacement of floor (including underlying bearers, joists and sub-floor)
    • Completely removing old (lead-based) paint from the inside and skim coating of the entire interior
    • Cutting three major holes into load-bearing double brick walls - one internal kitchen pass through, one external kitchen pass through, and an extra bedroom window
    • New kitchen
    • Converting a garage that was turned into a room back into a garage
    • Resurfacing the alfresco area floor
    It's a 120 year old workers cottage. Every subsequent owner has done surface-level renovations (e.g. painted right over water damage, put new floors over rotten joists etc)...I'm going to do it right and strip everything back to the core and start from scratch.
     
  10. money

    money Well-Known Member

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    What about if you own a property together with your parents (each person owns 33%) where you live in it by yourself, but they have their PPOR they live in. Will that affect anything or you can claim the property owned with parents as your own PPOR and be fully exempt from CGT when sold?
     
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  11. Terry_w

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

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    each owner has separate CGT interest in the property and will be taxed separately
     
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  12. Paul@PAS

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

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    CGT law applies to each interst and not the property as such. The ato assess each taxpayer. One owner can be exempt and the other taxed