Selling unit in Sydney .. To buy in Brisbane ?

I'm very tempted to sell a unit in Sydney that has already done quite well .. And using that money to invest in Brisbane - before it booms (or whilst its booming lol)

I've spoken to my accountant who has said that if sold in next 2 years, I would pay no cgt due to it being my place of residence

Is this a good idea?

If it is, would I look to buy a unit in Brisbane OR a house?

Budget would be about 350k

 

Where are you going to live? Under a bridge?

 

No lol I'm currently living in another property

You don't pay cgt if you've lived in a property then moved out - providing you sell it within 6 years of moving out. I've been out for 4 years.

 

Same question was asked and answered on this thread:
https://propertychat.com.au/communi...operties-in-brissy-or-adelaide.448/#post-4987

 

You'd have to pay selling costs, then buying costs/stamp duty, just to be in the same position you are in now.
What happens if Sydney keeps growing at the same rate, or better than the Brisbane growth you're expecting?
You would be worse off by disposing of a perfectly good asset.
Otherwise you could take the loss now and hope Brisbane grows by more than your extra costs over time.

How good are your predictions?

 

Why not keep the Sydney property, borrow against the increased equity, and use that as a deposit to buy another IP in Brisbane? RInse and repeat.

 

And while we are at it, you could move back into the place for 6 months within the next 2 years, restarting another 6 year allowance for no CGT. Once its reestablished as your PPoR, move back out and live wherever you want again.

The info from the ATO:
https://www.ato.gov.au/General/Capi...ng-as-your-main-residence-after-you-move-out/

If you are absent more than once during the period you own the home, the six year maximum period that you can treat it as your main residence while you use it to produce income applies separately to each period of absence.

 

Yes, this is a much better option IMO.

 

You can't have more then 1 PPOR at a time. Are you renting or owning the place you are currently in?

 

My honest advice would be to use the equity in Sydney to finance another property as.mentioned by other posters above.

My not so honest advice into sell Sydney and put every single dollar from sale proceeds into Brisbane.:-D

 

I'll just grab out my crystal ball. . . . .

But seriously. Equity out of Sydney to leverage into Brissie. Then you've got more fingers in more pies. And you're not "missing out" on either cities growth. What if Sydney keeps going? What if Brisbane doesn't live up to the hype? In the end it's better to pay Tax on a dollar you earn rather than save the tax on nothing.

 

Hi Marty, that's not strictly correct. Apparently according to the ATO you can nominate 2 properties as PPoRs for a maximum overlapping period of 6 months. So it allows you time to buy then sell.

https://www.ato.gov.au/General/Capital-gains-tax/In-detail/Real-estate/Moving-into-a-dwelling/

 

Like others have said, use the equity to buy in Brisbane. This would be a better option imo and you have exposure to two very different markets.

 

this cannot happen. Everyone on PC , including yours truly, is hyping brisbane

 

+1 for extracting equity from the Sydney place.

 

D'mo I understand your dilemma as have been considering selling 2 of our Sydney properties to extinguish our PPOR debt.

Sydney is at, or nearing its peak. The difference between other major markets is too great. Little wage growth, more high density supply coming to market and tighter lending restrictions will lead us to an extended period of stagnated (& falling) prices.

The question though is do I believe I will ever be able to buy these properties at, or close to the price I have paid. Unlikely.

I think to make great wealth from property you have to build a large asset base and allow it to run through two or three cycles. Then you'll be rewarded by the compound returns.

Trying to block out all the noise inbetween the peaks will be a challenge though.

 

I always prefer houses. Not much available for 350K within 20k of CBD. Plenty of units at that price in that radius.

 

I'm with the consensus.

If you can (e.g. have serviceability and can afford to), it probably makes sense to top up the Sydney one and use the equity to buy in Brisbane rather than selling the Sydney property.

 

Thanks to everyone who has responded

I guess I was being tempted to sell due to seeing other units in the area sell for substantially more than I paid, so it was quite appealing

To fill you, I've recently used the equity from Sydney place to purchase a house in algester .. Essentially, I've got the unit in Sydney and the house in Brisbane

If I sold unit, I'd have 2 properties in qld

After reading your advice, I'm going to to hold onto it and just keep chipping away

Thanks guys

 

@D'Mo, nice to see this outcome. I reckon in a decade or so, you'll be very glad you held on to it