Join Australia's most dynamic and respected property investment community

Land Tax and CGT consequences of PPOR holiday let

Discussion in 'Accounting & Tax' started by wategos, 7th Apr, 2016.

  1. wategos

    wategos Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    336
    Location:
    NSW
    Thinking of holiday letting 4-6 weeks a year PPOR over Xmas/NY period.
    I understand this would have a pro-rata effect on CGT exemption if I ever sold ? Not sure though. Say I holiday let for a total of 2 years out of 20 years ownership would I be taxed on just 10% of the capital gain ?
    And Land Tax (NSW)... still exempt or something liable there ? Any consequences for being let on the last day of the year ?
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,043
    Location:
    Sydney
    CGT - would depend on the circumstances, you may use the 6 year rule to be exempt.

    Land tax has a concession from absences of the PPOR. Much stricter than the income tax laws. see clause 8 of Schedule 1A LMA:
    LAND TAX MANAGEMENT ACT 1956 - SCHEDULE 1A
     
    wategos likes this.
  3. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,589
    Location:
    Sydney or NSW or Australia
    As you are absent from the ppor and renting the place on the census date (midnight 31/12) are you going to be liable for land tax?
     
  4. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,400
    Location:
    Sydney
    Temporary absence isnt same as it ceasing to be your primary residence under land tax laws. Get advice. For the hassles and insurance concerns it may hardly be worth it. Consider a exchange ?
     
    wategos and Scott No Mates like this.
  5. wategos

    wategos Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    336
    Location:
    NSW
    ok thanks... it looks like it is probably exempt from land tax according to that clause if you went for a holiday elsewhere and returned. The xmas period is quite lucrative so was looking at it from an extra income perspective.