Moving into/Renovating Investment Property with CGT implications

Discussion in 'The Buying & Selling Process' started by Newycoast, 14th May, 2020.

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  1. Newycoast

    Newycoast New Member

    Joined:
    14th May, 2020
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    Location:
    NW
    Hi all, I am new here so please be gentle..Also hope this is not too confusing!
    My partner and own a number of properties together and seprately in NSW and Qld.
    Over the past three years we have been renting together.. My partrner was renting out her PPOR in Qld and I have a property in NSW that I treat as my own PPOR.

    We have now left that rented premises and my partner has moved back into her PPOR (after it became vacant) to do renovations, work and due to current health situation and to restart the 6.5 year rule.
    I have now moved itno one of our joint rental properties (after it became vacant) to do renovations to it. The renovations make the property unrentable due to excavation, access, etc. I am unsure on how long I will reside in the joint rental property, be it till upon completion of the renovations or some time after that, before either selling or renting it depending on your answers.
    I have a number of questions in relation to this.

    Question 1. Are both or one of us able to claim any expenses such as bank repayments, rates, etc in relation to joint rental property whilst we do do renovations? (If no is there anyway to make these claimable? Such as me renting off my partner etc?)

    Question 2. The renovations are capital expenditure such as a carport, garage, new fencing and a large deck. Are we able to claim them off any CGT we pay when we sell the property?

    Question 3. Does our residing in the property affect the CGT on the property or our current PPOR? If so how and what is the best way to reduce our CGT? For example we have owned the joint rental property for 5 years in November this year, if we lived there for 5 years would it negate the CGT and if so what about our PPOF?

    Question 4. Is anyone aware of the "reasonable time" someone needs to move back into thier PPOR to restart the 6.5 year rule?

    There is also the option of us moving out and residing elsewhere or renting during the renovation stage. But joint rental property would remain empty due to the level of renovations.

    Thanks in advance..
     
  2. Terry_w

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

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    Spouses cannot claim 2 main residences for the CGT exemption.
    The 6.5 year rule doesn't exist - it is the 6 year rule!

    1. no
    2. yes potentially
    3 potentially yes
    4. no
     
  3. Terry_w

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

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    Australia wide