Investment property capital gains tax

Discussion in 'Accounting & Tax' started by Tony31, 15th Aug, 2019.

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  1. Tony31

    Tony31 New Member

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    I have a primary residence and also have an investment property. The investment property was purchased in 2014 and has always been rented out. If I sell my primary residence and move in to the investment property how long do I need to live there for to make it my primary residence and if I sell it after that period do I avoid paying CGT?
     
  2. Mike A

    Mike A Well-Known Member

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    Ato has no time frame for making a property your main residence except in limited circumstances. You have to have actually moved in.

    The investment property will always be subject to cgt.
     
  3. wylie

    wylie Moderator Staff Member

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    Rental properties that you've never lived in, and were rented from the start will never be capital gains tax free. You will pay based on proportion of time rented and time lived in.
     
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  4. Terry_w

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

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    Myth!

    Tax Tip 180: 10 Tax Myths
     
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  5. Paul@PAS

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

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    Probably the one everyone has had a mate tell them is correct. At a BBQ. Their accountant told them too...

    I have heard people say - You can move in for a week and it kills the tax. Wrong. You can live there one night. Wrong perhaps. The Couch decision provides case law to the issue and guides that a property INTENDED to be a main residence will never be a main residence until its actually occupied.
     
  6. Trainee

    Trainee Well-Known Member

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    Move in and die and avoid cgt....
     
  7. Paul@PAS

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

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    Depends if its a main residence
    Sometimes the person may own a interest in an aged care property which means a choice may or may not occur.
    Depends who owns the property
    If its pre-CGT why bother ?
    Surviving spouse who is resident and its a joint tenancy ?
     
  8. Zizi

    Zizi Well-Known Member

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    Extremely interesting thread. What is your opinion (not advice), on the following. Have PPOR in Queensland, now retired and want to build a house on investment block of land in WA, going to live in same, and rent out PPOR in Qld whilst keeping that residence as PPOR and using the six year rule. Fully prepared to pay CGT on property in WA if sold in the future. Do not wish to lose PPOR status on Qld house. Reason is that QLD property is zoned for subdivision. Any information would be appreciated. Cheers, Zizi
     
  9. Paul@PAS

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

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    The sale of the WA property may or may not even be a CGT issue. It could be new residential premises, subject to GST and also taxed as a isolated profit making intention. Residing in a property intended to be resold for profit doesnt turn off tax concerns. Our developer toolkit draws attention to a simple but challenging tax ruling on this issue which explains that it may not even be a CGT asset.

    The QLD issue seems more clear cut. It seems to meet the requirements to be a main residence hence an absence is then allowed.
     

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