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Tax implications for moving into investment property

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| 08 May 2012, 05:15 AM Agree 0
Hi all,

I currently have my PPOR rented out under the 6 year rule (no CGT if sold within this time), and own a separate investment property, which we are considering moving into. Most of our equity, quite a large amount, is in the PPOR property, with the investment property only having a small amount, therefore I do not want to lose the CGT gree exemption on my current PPOR. My question is...what happens if we move into the investment property? Can we still keep the other property as our PPOR even though we are living in our investment property, and is there any time limit on this when we need to change it to the property we moved into? Are there any tax implications or will we just lose the ability to claim on the inbestment property once we move into it?

Thank you,
  • addicted | 08 May 2012, 12:42 PM Agree 0
    You can only claim one PPOR at a time so if you move into the IP that becomes your PPOR and you lose the tax free exemption on the other. Not sure if you can still leave the first PPOR as your PPOR and keep the other as an IP while living in it.
    Speak to an accountant- but if you can leave the first as your IP you won't be able to claim tax breaks on the IP as it's no longer income producing. And you'll have to pay CGT on the IP even for the time you are living in it.
  • mortgagebuster | 14 May 2012, 01:36 AM Agree 0
    Its been a few years since I worked in tax and accounting but I believe you have a 6 month period before you have to change the PPR status of where you live, as one person said talk to your accountant, another possible issue would be to have the property that is changing to investment property valued at the date from when you change PPR status, so that any capital gains calculations in the future can be considered accurate. You could also contact the tax office and have them explain the issues with you over the phone.
    Any questions let me know. As I said its been a few years since I worked in tax and am unable to give qualified advice.
  • jazz albart | 13 Jun 2012, 09:05 AM Agree 0
    You can file an appeal through the tax office of your county. In order to prevail on appeal, you will have to have comparable properties assessed at a lower amount. A recent sale should set the value, as it has in your case.

    property taxes
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