Investment property change to main residential property then sell after renovate

For example, owner spent 500K to purchase an old house then leased it out for one year before owner moved back, after owner moved back, owner spent 300k to renovate and lived for one year. Afterward, owner had to sell this property at 900K.

ATO will think Capital gain is selling cost 900k to deduct purchase cost 500K？ Is there some method to capture that renovation cost？

 

no one has any idea? please

 

Speak to your accountant as to how to record your capital expenses and selling costs.

 

account doesn't know, if you have recommended accountant in melbourne area?

 

This is wrong on 2 levels. Cost base can include improvements and it needs to be apportioned

 

Many factors will affect the capital gain

1. The correct basis may to claim the cap allowance on the renos and even some depreciation
2. The claimed deductions for depn and cap allowances may impact CGT costbase
3. Acquisition costs like legals, duty and the NET value of the renovations will impact the costbase
4. Selling costs will add to the costbase.
5. 3rd element CGT costs for the property costs in the year the owner lived there will reduce the capital gain.
6. Pro-rata CGT applies for the taxable v exempt periods

I suspect you need tax advice and assistance so you dont overpay tax. You dont understand the correct method to minimise a capital gain.

 

your answer is good

 

thanks, that is quite professional answer, are you in melbourne area?