IP to PPOR

Discussion in 'Accounting & Tax' started by DOSHman, 8th Mar, 2022.

Join Australia's most dynamic and respected property investment community
Tags:
  1. DOSHman

    DOSHman Well-Known Member

    Joined:
    15th Dec, 2020
    Posts:
    122
    Location:
    Sydney
    Quick query on turning an IP into a PPOR..

    If I have owned an IP for 5 years but never lived in it, If I turn it into a PPOR will this entitle me to any CGT exemptions?

    DOSHman
     
    DOSHman, 8th Mar, 2022
    #1
  2. MondeoMan

    MondeoMan Well-Known Member

    Joined:
    20th Dec, 2016
    Posts:
    60
    Location:
    Melbourne
    Is it for forever home or short-term? our plan is when we retire sell our PPOR, pocket the tax-free money then move into the IP to live out the rest of our days.
     
    MondeoMan, 8th Mar, 2022
    #2
    Terry_w likes this.
  3. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    41,942
    Location:
    Australia wide
    my latest podcast is on this.

    The property can never be fully exempt.
     
    Terry_w, 8th Mar, 2022
    #3
  4. DOSHman

    DOSHman Well-Known Member

    Joined:
    15th Dec, 2020
    Posts:
    122
    Location:
    Sydney
    Having it as a PPOR would be for the short term. I will hold the property for the long term.
     
    DOSHman, 8th Mar, 2022
    #4
  5. DOSHman

    DOSHman Well-Known Member

    Joined:
    15th Dec, 2020
    Posts:
    122
    Location:
    Sydney
    would you care to send me a link on this?
     
    DOSHman, 8th Mar, 2022
    #5
  6. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    41,942
    Location:
    Australia wide
    Terry_w, 8th Mar, 2022
    #6
  7. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    41,942
    Location:
    Australia wide
    Terry_w, 8th Mar, 2022
    #7
  8. RENI99

    RENI99 Well-Known Member

    Joined:
    17th Nov, 2019
    Posts:
    663
    Location:
    Bribie Island
    It will provide you with a reduction in CGT based on the % of time as PPOR verses IP. So partially exempt.
    It may also make the property eligible for usage of the downsizer rule to enable transfer of 300K into super if over 60 and you have owned it for at least 10 years (can be IP for 5 of those 10 years).
    And if you move out after it has been your PPOR and switch back to an IO you could trigger the 6 years CGT exempt rule.
     
    RENI99, 8th Mar, 2022
    #8
    DOSHman and Terry_w like this.
  9. DOSHman

    DOSHman Well-Known Member

    Joined:
    15th Dec, 2020
    Posts:
    122
    Location:
    Sydney
    Great! thank you

    Thanks for the information.
    ill be sure to tune into that one
     
    DOSHman, 8th Mar, 2022
    #9
    Terry_w likes this.
Buy Property Interstate WITHOUT Buyers Agents!

Buy Property Interstate WITHOUT Dropping $15k On Buyers Agents Each Time! Helping People Achieve PASSIVE INCOME Using Our Unique Data-Driven System, So You Can Confidently Buy Top 5% Growth & Cashflow Property, Anywhere In Australia