Six-year rule

21/01/2011


Question: We’re planning to rent out our principal place of residence (PPOR) for a couple of years while we go travelling and then move back into it later. We then want to renovate and sell it. What are the applicable taxes in this situation? Can we still claim a capital gains tax (CGT) exemption?

Answer: Assuming that this property was your PPOR from the outset, you are entitled to move out and still nominate this property as your PPOR for up to six years before this property would be subject to CGT. Therefore in the case above, if you moved back into the property after a couple of years of travel and renovated and sold it, it would be exempt from CGT and any other taxes on sale. However, while you are renting the property, be aware that you may be subject to land tax each year, dependant on the state of jurisdiction.

David Naylor from Chan & Naylor

If you have a tax question for our experts, email it to: editor@yipmag.com.au 

Or post it on www.yourinvestmentpropertymag.com.au

Chan & Naylor is an accountancy firm that specialises in the areas of asset protection, wealth creation through property investing, estate planning and tax planning. The company ranks in BRW’s top 100 accountancy firms in Australia. For more information, phone (02) 9391 5400 or visit www.chan-naylor.com.au. The advice contained in this report is general in nature and its preparation has not taken any individual circumstances, objectives or financial needs into account. Readers are advised to seek appropriate advice from licensed professionals before embarking on any investments.

 

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Top Suburbs : alderley , tweed heads south , menai , stafford hts , alexandria

go back

Get help financing your investment



Do you need help finding the right loan for your investment?


When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here