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• Avoiding Capital Gain Tax

Avoiding Capital Gain Tax

• Mitch#2 Posted : Thursday, 10 January 2013 7:11:47 PM

  My understanding is that if you have rented the investment property for longer then 6 years no matter what you do you will have to pay taxes. But if it has been less then 6 years and you move into the property you will pay no taxes. Can do this back and forth as long as its less then 6 years. Hope it helps

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• Eos Property#3 Posted : Friday, 11 January 2013 11:08:34 AM

  CGT is not necessarily straightforward and more information is required to provide more accurate information.
  
  I assume you have a PPOR as well. Is this correct?
  
  If you do you are only allowed to have one PPOR at a time although the ATO does allow a small overlap if you are selling one property to move into another. If this property was once your PPOR you may have some leeway under the 6 yr rule as explained by MItch.
  
  If the property has never been your PPOR the best you can do is to receive CGT exemption for the period of time the property was your PPOR when you moved back in. The trouble is your existing home then starts to incur CGT during your absence while you live in your old IP.
  
  CGT may be minimised by selling in a low or no-income year. Depending upon your level of income and whether or not you qualify for the 50% CGT discount you may lose approximately 25% of your net gain in CGT.
  
  

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• BradQ#4 Posted : Tuesday, 15 January 2013 2:40:51 PM

  CGT is just income tax, so it shouldnt be seen as some horrible thing. living in it for 3 months will mean you do not pay capital gains on the increase in value during those 3 months. You would need to have valuations done to back that up also. So not really worth it. If you and your wife own it 50/50, and you have owned it for more than 12 months, then the tax is only on 50% of the increase in value, and then you would both split that to your relative tax brackets... my advice, get an accountant

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• Roger#5 Posted : Thursday, 4 April 2013 5:34:27 PM

  Can anyone tell me if we have to pay CGT on a property we share with family from a deceased estate. We have never rented however have payed rates , repairs ect.

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