Hi, The new house will settle in May, if we rent it out for 6 month before move in, Do we need to pay partial CGT when will sell ? I read about there is 6 month rule , you can take 6 month move in from old place to new place can qualify for CGT excemption? thanks
My understanding is that if you don't move in immediately, you will always pay a portion of the capital gain.
You wont have to pay CGT tghe issue is how it is calculated. The issue is the the 6months will always be a taxable period. Over 10 years that would be 182/3653 or 4.98%. BUT... All non-deductible ownership costs in the 9.5 years you live there add to the costbase. So the profit before the 4.98% is calculated would be reduced. To as low as $0 4.98% x zero = $0 Eligible costs include any ownership costs not deducted eg interest, repairs, improvements, rates, insurance. That is not what the 6 month rule says. The 6 months rule applies when taxpayers move from A to B and sell B. It allows A to also remain exempt despite B being the new home. The time when they can have TWO eligible exempt properties is up to 6 months . It doesnt work for the new home if it isnt also your main residence from day #1.
