CGT on this transaction ?

hi we bought a house in nov 2016 as a ppor we have been renovating it to become more nice to live in it's a big house and much bigger then we think we may actually need if we were to put it in the market in say 2 months what tax implications would we be up against ?

 

No CGT discount as you haven't owned it for 12 months unless you have lived in it as your ppor

 

It will need to have been your main residence (to avoid CGT). Have you lived in it while renovating?

From the ATO: "A mere intention to construct or occupy a dwelling as your main residence – without actually doing so – is not sufficient to obtain the exemption."

 

You would ordinarily say that the sale of a family home is free of tax as it would qualify for the main residence exemption.

However given the unusually short time period held you would really want a deep dive on the facts to understand the nature of the transaction. My concern is that you might do this often and the property is actually taxed on "revenue account" which means you pay tax on the sale.

If you build a house, renovate it and then sell it quickly and you have a history of doing this you might pay tax.

It would be worthwhile to see if you generated a profit after all of the holding costs, selling agents fees and renovation costs.

If you made a decent profit: take care. This might be a dangerous area for you.

 

And if you didn't live in it while renovating it is not the main residence and maybe taxed as income rather Tha. Capital gains

 

There is a special rule for renovation of your own home. It requires that after renovation you (both?) must occupy it as your main residence for at least three months as well as the entire period prior.

If you didnt actually occupy it as soon as practicable after acquisition then your ability to claim the main residence exemption would be limited.