Sell a house to yourself?

Discussion in 'Accounting & Tax' started by Brendon, 11th Sep, 2017.

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  1. Brendon

    Brendon Well-Known Member

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    I currently have a property which falls into the 6 year CGT exemption as I lived in it for a period before renting it out I want to capitalise on the exemption but at the same time I think it is a property that will do well over a long period of time.

    My question is, Is there anyway I can sell this property to myself (or otherwise my partner)

    The bonus for this would be that I can cash in on the gains the property has already made and effectively recycle the debt to release cash for a PPOR whilst keeping all debt deductible.

    For example
    purchase price $200k
    Current val $400k
    Original loan $160k

    New purchase $400k
    New loan $320k

    Cash freed up $160k

    Stamp duty would have to be paid I imagine but if the numbers worked is there anything stopping me doing this?
     
    Brendon, 11th Sep, 2017
    #1
  2. Trainee

    Trainee Well-Known Member

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    Where have you been living since you rented it out?

    Cant sell to yourself. To a partner, maybe. Is it worth the stamp duty?
     
    Trainee, 11th Sep, 2017
    #2
  3. Terry_w

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

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    You can't sell to yourself, but you can sell to another entity, including a spouse. I have written a few tips on this in the tax and legal section.
     
    Terry_w, 11th Sep, 2017
    #3
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  4. Brendon

    Brendon Well-Known Member

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    I've just been renting a room off mates, haven't bought another PPOR
     
    Brendon, 11th Sep, 2017
    #4
  5. wylie

    wylie Moderator Staff Member

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    You could move back in, establish it as your PPOR again and then move out and another six years starts.

    Buying another PPOR will change things but I'm not sure how. Someone else will be along to fill us in I'm sure.
     
    wylie, 11th Sep, 2017
    #5
    Archaon likes this.
  6. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Selling to an entity loses the CGT main residence exemption. Selling to another person needs to consider if BOTH of you satisfy the MRE. And if its an avoidance issue (likely). Tax advice is suggested as it seems a concern
     
    Paul@PAS, 11th Sep, 2017
    #6
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