CGT tax for partially rented and fully rented

My CGT situation is too complex for online calculators it seems

So i bought my house for $350,000 in August 2009, moved straight in, spent 30k renovating and had two rooms rented out (while living in it myself) a month after buying.

Then had it fully rented out while renting elswhere in December 2011.


I moved back in March 2016, fully occupied (no renters), spent another 50k renovating and i am now selling for $750,000 and will settle in june this year.

So does 6 year rule start once partially rented or once fully rented?
It is 6.5 years if starts from partially rented so not sure what happens

 

You had the 2 bedrooms rented out from the time of purchase until dec 2011 when you moved out ?

 

Yeh

 

Doesnt sound too complex.

Will get a partial main residence exemption. You wont get a full exemption as part of the property was used for income producing purposes.

 

Yeh

 

Still my primary place of residence, and live alone there for short period, so 6 year rule still applies right?

 

Ato has an example

Example: Ceasing to live in a home after part of it is used to produce income

Helen purchased a house under a contract that settled on 1 July 1998 and she moved in immediately. She used 75% of the house as her main residence and the remaining 25% as a doctor's surgery, which she used until 30 June 2010.

On 1 July 2010, she moved out and rented out the house until it was sold under a contract that settled on 30 June 2016. She made a capital gain of $400,000 when the house was sold.

Helen chooses to treat the house as her main residence for the six years it was rented out.

As 25% of the house was not used as her main residence during the period before Helen stopped living in it, part of the capital gain is assessable:

$400,000 × 25% = $100,000

 

Youve got two 6 year periods to consider

 

A little over simplified i think (also hoping).
Lived in it alone for a month, so bought as a home, not a partail business.
Also moved back in as a home.
Bought as a home for a month or two years (for example) orginally shouldnt matter should it?

 

Doesnt matter you rented out two rooms a percentage of the house will be subject to capital gains tax and that same percentage will be extended when you had moved out.

 

Does the % apply when the property was cht exempt while under the 6 year rule? The ato example seems to say the 75% exemption applies during the 6 year rule period?

 

You will need to get your accountantt to factor in all your third element costs in the capital gains tax calc as well as that will reduce the overall capital gain.

 

The percentage is extended

Ato in its guide states

If you use any part of your dwelling to produce income before you stop living in it, you can't apply the continuing main residence exemption to that part. This means you can't get the main residence exemption for that part of the dwelling either before or after you stop living in it.

 

So if i were to live alone for a month before fully renting it out, the 6 years after would be extended as cgt tax exempt?

 

No

 

Really apreciate you taking the time to respond. Doesn’t seem logical though
Say i buy it, live alone for a year, rent two rooms for 6 months, then live alone again for a year before moving out. The next 6 years would still be at 33% exemption?

 

No because it wont be 33%. It will be a smaller percentage as it is an area size and time based calculation.

 

Oh so the time period before moving out will be averaged out to create a percentage, which is then projected for the next 6 years. Right?
Never heard of the area size thing. Is that on ATO website?

 

Using your home to produce income

Didnt you use such a percentage to claim your interest deductions, council rates, etc as an expense against the income you earned from them.

 

Easier to get personal advice isnt it ?