Cgt

Hi - Quick question on cap gains. Am in the process of selling what was my principle private residence for 3 years. Moved out of the property into rented accommodation about eight months ago and in turn rented my property. Assume capital gains applicable? If so, is it isolated to the period of time that I have received an income from the property?

Appreciate any insights!

Thanks

sorrento said:

Am in the process of selling what was my principle private residence for 3 years. Moved out of the property into rented accommodation about eight months ago and in turn rented my property. Assume capital gains applicable? If so, is it isolated to the period of time that I have received an income from the property?

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In relation to CGT, there is an exemption on the final 12 months of ownership where the property is considered as your PPR.

So, if you manage to sell the property in the next four months (or within 12 months of vacating it as your PPR to be more detailed) no CGT will be due.

Lots of details on the calculation of CGT on AAM if you do a search.

Basically... the fraction of CGT due is based on:
(Non PPR term of ownership - final 12 months if non PPR during that time) / Total period of ownership

Thanks a mil for that Satanta. Better get the skates on!

sorrento said:

Thanks a mil for that Satanta. Better get the skates on!

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Given that you've owned the property for 3 years and 8 months, I'm guessing it was bought in ~August 2004.

Given the current property market, the amount assessable for CGT ((sale price - purchase price - allowable expenses) * fraction of CGT due taking into account PPR reduction) might be relatively small.

Did you pay the (potential) clawback on Stamp Duty when the Apartment was rented in August 2007? (I know it was changed in the last budget from 5 to 2 years for clawback, but can't remember if the change was backdated to allow for a person renting in August 2007 to fall under the new rules, someone else might be able to clarify.... or if you already paid the investor rate of SD it might be irrelevant)

Not understanding the stamp duty implications! Paid stamp duty in full at time of purchase (weren't eligble for FTB allowances) so assume we are clear?

sorrento said:

Not understanding the stamp duty implications! Paid stamp duty in full at time of purchase (weren't eligble for FTB allowances) so assume we are clear?

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Not necessarily. If you rented the property out within 5 years (2 years since Budget 2008) of purchase as an owner occupied PPR (Principal Private Residence) then you are liable for the difference between what an investor would have paid and what you actually paid. Did you pay the same as investor SD on the original purchase?

Just checked through original docs ... purchased in 2003. Stamp duty rate paid was 6% - just googled to check what rate was applicable to investors and it appears to be the same.