Valuation Report for moving into IP

I'm considering moving into an IP that I've owned for about 8 years and am planning to do a bit of renovation before i move in (its very dated).

Am I right to get a valuation report so I get a baseline for CGT should I sell the property in the future (I will be using 6 year CGT rule - will have CGT pro-rataed for 2 years) ?
And should this be done before renovations, so as to get the value as low as possible ? This is to keep CGT low if I sell it when I move out.

Is there any value in getting more then one QS and report ? So that I can chose the one that gives me the best outcome in the future when I do sell ?

thanks

 

Have you lived in it during the last 8 years?

 

yes, for first year and a bit

 

s118.192 itaa97 does not allow a valuation to be used in this example. Prorata cgt applies. There are specific tax strategies that will reduce the tax. Our client cgt record assists...

 

Valuation not necessary.

Pro rata based on time it was an ip vs time a main residence.

Third element costs will help reduce the cgt.

 

Thanks for that. And for the tip on reading up on third element costs, looks like I should split a loan that funds the renovations so I can include interest on this non-deductible loan and check of what can fall under 'repairs'

And no point of valuation report unless in the future I move out again and turn it into an IP

 

11...NEVER any point to a valuation. s118-192 deals with the valuation issue and only ever applies in limited circumstances of a property that has always been a home. Then it produces income for the FIRST time. If you move out in future then the pro-rata still applies and valuation remains unnecessary.

There also will be important reasons why a QS report may reduce your future CGT too

 

Thanks Paul, I was more thinking that when I move out and its an IP again, I can start claiming depreciation on the PPE/fittings again and so will need a valuation report to back that

 

And when you arent there it affects CGT profit as the non-deductible depreciation can increase the costbase.

So important now with the 8 May 2017 changes that people see a QS report as NOT just for saving income tax. It can save CGT later too.

 

just to clarify, did you mean I can include the non-deductible depreciation during the period I do treat it as my PPOR ? That's how I understood the new rules to mean...

I'll get the QS report done right after I reno before I move in then.

 

Yes you can...These are called Third element CGT costs. They reduce the total profit which is then pro-rata based on the taxable days used. Third element costs cant always be used....eg If you buy a home and reside in it and its 100% exempt until the time it produces rent for the first time.

I always ask - Why would you not want to a claim a reduction to a CGT amount ? Answer is - When you didnt know and failed to collect the data. Or when you DIY your own tax and dont know better.

Its common to find taxpayers who overpay tax. Either DIY or non-property savvy tax assistance.

The changes made to depreciation rules make the need for a QS report even more important, not less. Soooo many taxpayers will be throwing away tax benefits.

 

Thanks Paul, much appreciated

 

correct Paul. why have accountants forgotten that non claimable depreciation allowances are a third element cost ?

 

Ahh thats cause many dont know. I could write a book