I've recently purchased a new home (to become a PPR), and I am currently renovating and planning to move in shortly and then sell my existing home. My understanding is that there is a 6 month grace period in which both properties are treated as PPR and therefore CGT does not apply. What happens in the case of Land Tax though? Does land tax have a similar grace period? As much as I would like to move into the new PPR ASAP and sell the existing PPR ASAP, delays do happen and I'm running close to the 31 Dec date by the time (for settlement purposes).
Look at clause 7 of Schedule 1A Land Tax Management Act or seek advice from a lawyer. You might be able to use the concession for change or PPOR.
NSW Schedule 1A Clause 7 : The two homes will be exempt for the same tax year if the following conditions are satisfied: the former home was the owner’s exempt residence on the taxing date or the previous taxing date, and the new home became owned within the period of 6 months preceding the taxing date and, the new home is used and occupied as the owner’s principal place of residence by the taxing date for the next tax year (see sub-clause (3A)). Example: A person, who already owns a home, becomes the owner of a new home in October 2013 and moves into this new home in March 2014. Both homes are exempt for the 2014 tax year, regardless of which one was used and occupied on 31 December 2013 (which is the taxing date for the 2014 tax year). The concession may also apply where, at a relevant taxing date, a person is the owner of both an existing exempt home and a parcel of vacant land on which the person intends to build a new home, provided that: the vacant land was purchased within the period of 6 months preceding the taxing date; and the new home is completed and occupied by the next taxing date. No income can be derived from the former home before the relevant taxing date, other than from an “excluded residential occupancy” permitted by clause 4, or from a lease or licence arrangement with a purchaser prior to completion of a sale if the former home is being sold. As there is no requirement to sell the former home, income can be derived from it at any time after the relevant taxing date. Additionally, no income can be derived from the new home except from a tenancy which was entered into by the previous owner. The concession granted by this clause allowing the PPR exemption for two properties only applies for one tax year. If the new residence is not occupied by the person as their principal place of residence by the next taxing date, a clawback will apply, and land tax will be assessed on whichever of the two properties was not used as the principal place of residence on the relevant taxing date.
