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kate
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Post subject: Defining principal residence.
 Posted: Jan 21, 2006 - 11:30 AM
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Joined: Jan 21, 2006
Posts: 1
Status: Offline
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My husband and I are looking to retire in the next 1-2 years. We own three homes, one in Qld, a holiday house at the beach, and our own residence in Victoria. The Qld house and beach house has been rented for many years. The beach house is broken in 2 = the upstairs we have kept as a holiday house for the past 5 years and we have rented out the downstairs. The beach house would have a potential profit if sold of up to $600k from when we first purchased it 8 years ago. We are at a point in our lives where we can be flexible on where we live in the next couple of years. If we moved to the beach house - ie make it our principal place of residence for 2 years would this then become exempt from capital gains tax?
The beach house is now vacant. |
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lot109
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Post subject: Principal Place of Residence
Posted: Jan 22, 2006 - 02:19 PM
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Joined: Jan 08, 2006
Posts: 10
Status: Offline
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Hi Kate
You need to check this out with your accountant.
I'm sorry to be the bearer of bad tidings.
Moving in to the property as your principal place of residence will not eliminate your liability for capital gains tax. When you sell the property you'll pay CGT based on the value of the property when it becomes your principal place of residence. There have been some ATO rulings on this recently.
You also need to consider also whether you're going to sell your current principal place of residence, as there may be some CGT ramifications there.
When you live in a property and then let it out you have 6 years from letting it out to sell it and not pay CGT. |
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bigsky
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Post subject: RE: Principal Place of Residence
Posted: Feb 14, 2006 - 01:21 AM
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Joined: Feb 14, 2006
Posts: 5
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| if you just donot sell your beach house i dont think you need to pay tax for it |
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lot109
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Post subject: Defining Principal Residence
Posted: Feb 14, 2006 - 05:52 AM
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Joined: Jan 08, 2006
Posts: 10
Status: Offline
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You're absolutely correct.
There's no capital gains tax on unrealised capital gains. If you don't sell, there's no capital gains tax. |
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