How many times can we get CGT exemption?

I know that there is CGT exemption for a PPoR, and there can be only 1 PPoR at any time. But there's also a rule that allows one to move out of the PPoR for up to 6 years and still get the tax exemption. My question is that is there a limit on how many times we can do this? Not that I may use this as part of my strategy, but just want to understand it better.

For example, I may buy a PPoR, live in it for one year. Then move out and rent it our for 6 years. During this time I also buy several IPs. Before 6 years, I move back in to the PPoR so when I sell it, I will get tax exemption. And selling it, I can choose one of the remaining IPs as PPoR and will get CGT exemption for this one too? And this can be repeated many times?

 

You can only claim it once for any moment in time.

So if one property has enjoyed the exemption in 2017 no other property will enjoy the main residence exemption for that year.

 

The exemption can be affected by a number of factors incl tax residency and also choice as well as ONE complete exemption for spouses/partners/family and never one each. If the property is NOT rented out there is no 6 year exemption - Its unlimited. This does "collide" with residency. And to follow on from Ross ther can only be one instance when the exemption overlaps by UP to 182 days - Thats when the former main residence is departed and SOLD within 6 months while living in the new home. Its not a calendar year and is quite specific

And you can have two main residences within 2017. Other than the 6 months its cant be the same days however. ie no overlap

If the 6 year rule is used it can be reset except in some non resident issues and double dipped.

 

Once you sell your PPOR, you can move into one of your IPs and establish it as your new PPOR. It then becomes CGT exempt from the date you move in. Previous time will be subject to CGT. Moving forward you can use the 6 year rule. But the time it was rented initially will always be subject to CGT.
Marg

 

Throwing these wacky questions out there, but could you have a tenanted property in a discretionary trust or unit trust to become a PPOR by moving into it then selling it later on and getting the CGT exemption?

Also, any possibility of moving into a fully commercial property (initially rented) and living there and getting the same tax benefits?

 

Main residence CGT exemption cannot apply to trust owned property - except in limited circumstances such as bare trust.

 

No limits, in fact the legislation actually has this example:

Example: You live in a house for 3 years. You are posted overseas for 5 years and you rent it out during your absence. On your return you move back into it for 2 years. You are then posted overseas again for 4 years (again renting it out), at the end of which you sell the house.

 

If you rent out the PPOR for 5-6 months a year to go on holidays, can you keep on doing this for a few years and still avoid both CGT and land tax?

 

Yes, on CGT depending on the circumstances.

Land tax will depend on the state and the timing. In NSW - maybe

 

There is a tax arguement that I have seen that considers the issue of the main residnce as merely temporary and not the MAIN residence. But likely. Yes if the absence is temporary as that is covered by the absence rule

 

HI Paul/Terry

For example, we have Main residence(no-1) for 6 year and move to new residance brand new for 3 months to live in it and sell it while main one is still empty(no rent-generating) ,since the main one is empty we move back to no-1, do we still need to pay CGT on residence -2 as we intend to move and the main one is not rented we so move back?

 

You would not get the exemption on both.

If you live one the 2nd one before selling it so soon it could be on revenue account and the CGT main residence exemption may not be available

 

Personal tax advice time.

 

What's ur fees on the

So terry u mean we lose residence-1 main exempt?

 

Yes. one of them will be subject to CGT or income tax.

 

Maybe it is just me that sees cogs going round trying to find a way to cheat the system....on so many of these threads.

You get to have one home.

 

Its not a cheat to use the exemption. Its wise to legitimately use the exemption to best effect.

 

Is it 3 months you need to live in to get a CGT exempt or more?

 

no

 

There is a three month rule for newly constructed and renovated property that you reside in then sell. But its far more complex than that and you could easily get the dates wrong or be mistaken to think it always applies. If you reside in a property constructed for the purposes of profiting then the ATO view can be its not a CGT asset and so no CGT main residence exemption applies......Perhaps GST too.

Short term occupancy can be signs of other issues and worth getting advice