One downfall to renting out an investment property is that Capital Gains Tax (CGT) will be payable upon the sale of the property. CGT is the tax charged on capital gains that are procured from an asset, you are liable to pay this tax when your capital gains exceed your capital losses in an income year. However, there are legal ways to avoid paying CGT while renting out your house. Capital gains tax exemptions are allowed by the Australian Taxation Office (ATO) under certain scenarios.
People’s lives are constantly changing, as such there are many reasons why you may decide to lease out your main place of residence. In order to do this without incurring CGT it is important to be aware of the ATO’s guidelines with regards to CGT exemptions.
The following simple rules apply:
– Only your main place of dwelling will be exempt from CGT. Thus you can’t own two properties, live in one for a couple of years and then alternate between that property and your main residence while avoiding CGT on both houses.
– Usually, if you purchased a house after 7.30pm on 20 August 1996 you have to have lived in it when it was first bought (i.e. not rented it out) to be entitled to a full exemption. This is because if you rent the house out straight away the ATO deems you to have acquired the property purely to produce income.
– Provided the above terms are met, you may be exempt from CGT if you rent out your home for less than six years.
– If you’ve held a property for more than twelve months and the ATO has deemed you subject to CGT, you will usually be entitled to a 50% discount.
Capital gains tax is dependant on individual circumstances and as such things can become quite complex. Especially when how many properties you own and how frequently you move, get drawn into the picture.
FULL EXEMPTIONS
If your house is nominated as your sole dwelling, you can usually rent it out for six years while living elsewhere. Once that period of time has elapsed you must return to live in that house for an acceptable amount of time in order to be allowed another rental period of six years. This process can generally be repeated for any amount of time and the property will remain exempt from CGT. The same can also be said if you rent the property out for six years, then leave it vacant from there on in. A tax payer can often still apply the six year exemption rule if they acquire and reside in another property. However there is no ‘Main Residence’ exemption applied to the second property which subsequently becomes subject to Capital Gains Tax.
PARTIAL EXEMPTIONS
In situations where multiple investment properties are acquired over a period of time, the ATO sees the six years as cumulative. This denotes that you only get six rental years in total before you are liable to pay CGT. Fortunately the CGT will be exacted proportionately. As a general example, this means if you reside in your main residence for twelve years before you rent it out for eight years, and made a $200,000 capital gain on the property after that, you will only have to pay CGT for the two year period that exceeds the six-year exemption. Thus the CGT would be exacted on $20,000 (being two years excess over a six year period divided by a total of twenty years owned).
PARTIAL MAIN RESIDENCE EXEMPTION AFTER 1996
If you originally bought your house with the intent to rent it out after August 20, 1996, but later changed your mind and choose to live there, you will become partially exempt from CGT on a proportionate basis of years lived in to years rented.
When there is a change of status from income producing to main residence or vice versa, you should obtain a valuation as of that date. A Real Estate Agent’s valuation should suffice, but a valuation from a licensed valuer is recommended.
Anyone subject to CGT should be aware of the following rules:
– Although there are provisions for farmers, properties over 2 hectares are not exempt from CGT.
– The residences of private companies and trusts do not qualify for an exemption.
– If you use part of your house in order to generate income, for example a home business, then CGT will be exacted on that section if you claim tax deductions such as interest rates, insurance or rent.
– If you have purchased a new property but are still in the process of selling the old one, you need to complete the sale within six months in order to avoid CGT.
– When it comes to deceased estates, presuming the house was the sole residence of the deceased, a full exemption exists providing the property is sold within two years of the deceased’s passing.
Capital Gains Tax liabilities, concessions and exemptions change depending on your individual circumstances, for this reason it is important to seek advice from a professional. Here at The Quinn Group our experienced team of accountants can assist you in regards to Capital Gains Tax. For more information submit an online enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to book an appointment.
I bought a property in 1998 and rented it out for 1year the i moved into the house and lived in for 6 months then i rented it out for 3 years thn i moved in again and lived in it for 4 months and then i rented it out for 6.5 years and finally sold in June 2010. I would like to get an advice on CGT liability, My understanding according to information read on the ATO site and the examples provided is that i have to pay CGT fot 18 months on pro rata bass.
Please advise how much it will cost me to get the advice and to fill out tax returns for 4 years, Information will be provided in separate excel spreadsheet for each year through email because i reside overseas. Regards.
Hi John
Someone from our office will be in contact with you shortly
Kind Regards
I would like to add that yhis is the only property i had in Australia. Regards
Hi,
My partner purchased a property in March 2008, lived in it full-time until it was rented out in September or October 2009. If we sell it now, will it be exempted from the CGT?
Thanks!
Hi Ellen
Someone from our office will be in contact with you shortly.
Kind Regards
I won a property in a competition and was going to rent it out as I am paying off my own home. What taxes do I have to pay I would not be making much money on the rent as it’s a low rental and the rent will cover Insurance, Maintenance, Real Estate Fees, etc so I won’t make a big profit on rent probably 3k a year if that.
I was just going to hang onto the property for the future as in investment. Will this be worth doing or will I have to pay taxes etc.
Hi Sue
Thank you for submitting an enquiry.
Someone from our office will be in contact with you shortly.
Kind Regards,
Michael Quinn
Sorry I left out the value of the property which was $55k, it’s a little miners cottage.
The rent I would receive would be minimal maybe $100 per week.
I bought a property in 2001 for the sole purpose of living in it. In 2003, I met my husband and in 2004 we decided to rent it out. It is still currently leased. We are considering selling next year, which will be over the 6 year rule by about a year, does the above mean that we will only need to pay capital gains for 1 year?
Thanks
Hi Donna
Thank you for your enquiry.
Someone from our office will be in contact with you shortly.
Kind Regards
Hi,
I bought an investment property 3 years ago (year 2007) and rent it out since then. Now I am moving back to renovate this place. I want to avoid capital gains in the future when I want to sell, is it worth getting this property revalued by a professional? How long should I live in this property before I sell it?
Thanks
Shelly
Hi Shelly
Thank you for your enquiry.
Someone from our office will be in contact with you shortly.
Kind Regards
Hi when i bought my unit the condition was that i could not kick out my tenants untill the lease had finished. I would have had it rented for 3 months before living in it. Do i need to pay capital gains if i sell. I have lived in it for over 1 and a half years.
Regards
Adela
Hi there, I own a property in melbourne which i lived in, for approximately the first 7-8 months, then decided to rent it for the past 8 years. I ‘ve rencently moved back into the property for the past 6 months however am in two minds whether i should buy and sell. In the time my house would of doubled in price, then again so has every other house. Just wondering if i’ll be slugged CGT?
Hi,
I am trying to understand my liability for CGT on the following, and have heard so many versions, I just want to understand the right one…
We jointly purchased our family home in July 1992 and then in December 2001 had to move overseas for work, and decided to rent the house out. It stayed rented till we returned in April 2006, when we decided to buy a second home and treat this as PPOR and left the property rented out. We finally sold the property in July 2010 and now I need to understand does any of this exemption for 6 years and pro rata after apply and against what initial value for the property.
I.e is the value to calculate the gain against from the sold value just the 2001 value or is the 6 years exempt and only pro-rata beyond the 6 years and applied against which initial value.. 1992 value or 2001 value ?
Best Regards
Paul
Hi,
I am thinking of selling my investment property, but would first like to get a full understanding on how much CGT I will have to pay.
I have had the investment property for 4.5 years, and within this time, I had lived in for 3 months in year 2.
I have been using some online CGT calculators and its coming to some ridiculous amount of $30,000.
I have a few questions on the expenses you can claim to lower the CGT (e.g interest on investment loan, rates etc etc) however I am unclear if I can claim all these amount for the full 4.5 years, or just for the current taxable income year (2010/2011).
Thanks
Hi Con and Honda
Someone from our office will be in contact with each of you shortly to assist with your questions.
Thank You
HI,
I have lived in my house for 5 years and have put it on the market to sell. After being for sale for 3 months without any bites, we have decided to rent it to a family member until we get a sale. Will we be have to pay CGT because of this?
Thanks, Adam
Hi Adam
Thank you for your enquiry.
Someone from our office will be in contact with you shortly.
Kind Regards
Hello
I purchased my first property in 2007 with the FHOG. I rented it out for first 12 months and then moved into for 1.5 years. I have sinced rented it out for 1.5 years. If I sell the property now will I be liable for any CGT?
I purchased a second property recently which I intend to move into in 6 months. If i rent the property out for 6 months and then move into it and live in it for say 5 years before selling will i be liable for any CGT?
Thanks
Hi Justin
Thank you for your enquiry.
Someone from our office will be in contact with you shortly.
Kind Regards
Hi,
I am thinking of relocating to France and keeping my property here as an investment property. What would my options be please for avoiding CGT upon the sale of that property in the future. I only have the one property which I have lived in for the past 5 years would I need to return to Australia and live in my house here for a period of time?
If you can please advise on this.
Many thanks.
Hi Fiona. Thank you for your enquiry. Someone from our office will be in contact with you shortly. Kind Regards
Hi There,
My partner and i purchased a property 3 years ago. We spent a year living it ourselves while renovating it. After the year of being there alone we rented out our 2 spare bedrooms. We paid tax on the money. The house has quite a big mortgage so me and my partner decided to sell it. We stopped renting out the rooms 6 months ago so we wouldn’t have to pay cgt on the 6 year rule. We are now trying to sell the property but due to the economic downturn we aren’t getting alot of interest. Instead of renting out rooms again we wish to rent the whole property out for a couple more years but still sell within the 6 years.
To avoid paying cgt do we need to move into the property again for 6 months before selling or will the fact we took it back for the last 6 months as our main residence be succifient.? Also does the 6 years start from the day we bought it or from the day we started renting out the rooms?
Many thanks
I have two rental properies.
The first I bought in 2001 and lived there for 3 years. It has been rented since, as still is.
The second, I bought in 2004 and lived there untill 2010.
I am thinking of selling one, preferably the first one, but I believe I the second would only be able to be sold CGT free and not the first. I would be willing to move into the first for 6 months if it saves me alot of $.
What would be my best option?
Hi Amanda and Ryan
Thank you for your enquiries regarding CGT.
Someone from our office will be in contact with you shortly.
Kind Regards,
Michael Quinn
We have owned our property since 2003 and lived in it until 2005, and have been renting it out until now. As it has now been 6 years we have moved the tenants out and intend to make it our primary residence. Can you advise how long we must remain in the property before we can rent it again, and avoid CGT?
Thank you
Hi,
I purchased my house in January 2003, it was rented out for until i moved into it in Jan 2007- it has been my main residnece ever since. When i moved into it in 2007 the market in myy area had been fairly flat, and the house hadnt appreciated much, but since moving in the cvalue has increased a fair bit. WIll I be paying captial gains tax on gains that happened after i moved back in? Overall does the tax rate reduce the more years i live in it?
Cheers,
Adam
Hi there – I bought a property in NSW in Dec 2004 for 282k as owner occupier. I’m about to sell it in 2011 for 400k. In the meantime, in Jan 2007 we rented the NSW property out and moved to Victoria, and in Feb 2009 in VIC we acquired another home as owner occupier for 415k. My rough undertanding is that either property could be ‘main residence’ and so CGT exempt, but how do I work out which one we should nomiate? Thanks
Hi There, We’re looking at buying a property and then staying with family while renting it out for a year before moving into it ourselves.
If there are already tenants in there when we buy it, and they stay in for 6-12 months, do we have to pay CGT when we move in? Or when we sell it? Or at all if it is only for a short period of time?
Alternatively, if there is not tenants in it, and we buy it and then rent it out while staying with family, do we have to pay CGT for the 6-12 months that it is being rented out before we move into it?
Look forward to hearing back from you
Thanks
i have a property i have lived in for 2 1/2 years and have decided to rent it out ive also just brought a new place with my partner under both of our names which we will live in if i sell my rental say in 12 months will i have to pay capital gains
I purchased a property in 2009 Jan and moved in it straight away. I stayed in there for over 12 months then rented out the property as we went overseas. I directed all my mail to my daughter’s place for all this time I’ve been away from Australia. THe property has been leased out for 1.5 years now. I want to sell the property as I no longer have use for it. Would I be fully exempted from capital gains tax as this is the only house that my partner and I possess? Thank you
Hi there I purchased a property 3 years ago. Lived in it for 6 months then rented it out. If I sell it now, how many month do I have to move back into the property to avoid paying capital gains?
Hi
I am an Australian Citizen who has lived abroad since 1982. I purchased a property in 2004 which has been rented out for the entire period. I am now planning to return to Australia to live. Will I be able to avoid paying Capital Gains by living in the property for a period of time? If so, what would be the minimum amount of time that I would have to live in it?
Many thanks.
I bought a house last year July 2010 with the intention to live by myself. But after I bought the house my family all against me moving out by myself before I get married. It is not acceptable in a strict family like mine so I rent it out. Now I will get married in 4 months and want to buy a house because my tenant contract isn’t up yet and my fiance has his own home as well so he cant buy the house under his name. what are my options to buying another house?
Hello,
I purchased a land in 2008, builted a house and moved into it in 2009 for 7 months and then rented out. If i sell this home (which is still an investment property) before 2013 (within 6 years) then will i avoid any CGT on the gains that i have made all this while?
Also, if i decide to move into the property within 6 years (purely to save the CGT), then how long do i have to stay in there before i can move out again in order to avoid any CGT on it?
I went to a property seminar at Convention Centre here in Melboure last weekend and spoke to some experts there who couldnt answer my question and asked me to refer to the ATO’s website however i was told that as long as i have lived there for atleast 6 months straight after i had bought the property then i wont incur any CGT if i sell the house within 6 years from the date the final settlement of the house was done.
Can you please advise.
Cheers
hi there, i bought a property in 2006 lived in it until 2011 and now its rented. I bought a second property which is my PPOR. Am i able to rent out my first property for 6 years and be exempt from CGT? Or because i have a second property am i not exempt?
Thanks!
Bought an IP in 2007 for 335k. Just had an offer of 645k. Has been rented since buying. As I’m in mining the CGT is ridiculous. What can I do ?
Hi I am selling a house (my main dwelling) and I am buying an apartment, If i live in it for 12 months then rent it out, and sell it within 6 years do I avoid CGT ?
I bought a condo and rented it out for 5 years. Then I moved into it for 2 years which I believe now exempts me from capital gains tax. But if I now rent it out again for 2-3 years and then sell it, will I have to pay capital gains tax?
Hi there, i bought a property in Dec 2007 lived in it until Dec 2008 and now its rented. I bought a second property which is my PPOR. Am i able to rent out my first property for 6 years and be exempt from CGT? Or because i have a second property am i not exempt?
Thanks!
I purchased my rental property May 2010 I want to sell it to reinvest in another property. I would like to pay off some of my debt. How can I avoid capital. Gain tax. I need advise before I sell.
Hi,
We have recently sold our home & are considering a new property. We have decided we would like to buy & rent the property out for the 1st year while we travel around Australia & come back to live in it & eventually upgrade to a bigger home. Is there any wag to do this & avoid capital gains? It will be our only property & we will come back to live in it, & could possibly move in temporarily to help avoid CGT.
Any suggestions on how to avoid CGT would be great, thank you
Sarah
I purchased my property in May 2002 and lived in until November 2003 when I went to work overseas. I rented the property while I was away and now when I am back I would like to sell it. How long do I need to live in the property in order to be exempted from CGT?
Hi I’m hoping you can help or offer advice. I have owned my home for approx 12 years and have just purchased another property with my partner which we are living in full time. I have now placed tenants in my original home. Will I be liable for CGT when I sell the home I lived in for 12 years? And also, as we borrowed 100% of the value of our new home it’s considered an investment property. Will we still have to pay CGT when we sell it (this isn’t planned and would hopefully be over 12 years down the track) or is there a way we can avoid this as we are living there full time.. it’s all very confusing!
I bought house for myself living from 2007, and bought another house for rental from 2009. Now I am going to move in the second one and rent out the first house. please tell me which way I should to do to avoid or reduce the CGT?
My son bought a house in 1 March 2001 before going to Europe for a 6 month holiday with the intention of living in it when he got back. He rented it out about 1 month after settlement. He extended his stay to Europe and in fact has not come back to live in Australia to date. His house has been rented (with breaks between tenants) for the entire period he has been out of Australia. He also took a FHOG and had to pay this back. He now lives in the UK and has purchased a house there. I understand he will be up for CGT when he sells the property and was wondering how this would be calculated or there are any loopholes that would exempt him from CGT. Thanks
Hi, i have purchased an off-the-plan property in Victoria state, which will be ready in Dec 2012 (intention is to rent it out from day1). At the same time, I am thinking of purchasing a property in NSW and make it my Primary Residence (am currently renting a place in Sydney). Before i make any new purchases, i would like to know what are my CGT liabilities and scenarios. Can someone from your office pls contact me? Thanks.
Hi,
My partner and i purchased a property in September 2008, lived in it full-time until renting it out in March 2011 and purchasing another house to live in. If we sell it now, will it be exempted from the CGT?
Is there anyway of avoiding CGT all together?
Whats your advise if im going to purchase many properties over the next ten years to avoid CGT?
Regards
Robert
Hi,
I purchased a property in February 2007 and lived in it until September 2008 and have since then rented it out.
Would I be exempt from CGT if I sell next year?
Thanks for your help,
Kristy
hi ,
i purchased a property in 2000 lived for 6 months to a year then have rented it out ever since.
we are about to have a baby and are considering moving in to this property to save money as the loan is less than my current place (if we decided to do this we will rent out our current place). if we decide to sell this property in a year or two will i have to pay CGT!
Hi Please help
I bought a property in UK during 2003 and rented it out.
I’ve never lived in this property & have no intention of doing so.
Will I have to pay Capital Gains Tax if I sold this property 2 yrs after becoming an Australian Resident?
Thanks For your help
Mr & Mrs T
Hi, I purchased a property which I have lived in for 2 years,now the property is for sale as I would like something bigger. The buyer is playing games, I am wondering if I rent it now for a fixed term – say 2 years, and then re-market the property for sale, would i be subject to CGT for the 2 year period it was rented?
Thank you
Hi.
I am building 2 homes on one block. I plan to live in one (Home ‘A’) ‘for 3 months, sell it and move into the other (Home ‘B’). In this scenario, what would be my capital gains tax obligations? Is there a way that I could avoid CGT completely on Home ‘A’?.
Thanks.
my prime residence I’m building by a builder,if i sell it do,do i have capital gains tax ,.or i have to live in it .
Hi
I purchased an apartment early 2009. Its my primary place of residence in Australia but I have been working overseas from early 2010. The property has never generated rental income as I have a family member living in the property. Am I liable for CGT?
I bought my primary home in 2010. I have recently purchased another property and would like to rent it out for 2 years prior to moving in. At that time I will be selling my primary home purchased in 2010. I realise my 1st property will be exempt from CGT but will my second property that I recently purchased be exempt despite tenants about to move in for approximately 2 years?
I am happy to live in my second home and rent the home purchased in 2010 if it helps with avoiding CGT
Hi,
My wife and I purchased our first home in 2004 and lived in it up till July 2008, we then rented the house until 2011 where we made the decision to sell as we have moved overseas. Our house was the primary place of residence in Australia. We were paying off the mortgage right up till the time we sold the house and then paid out the loan with the payment from the sale of the house. Are we liable for CGT?
Regards,
Peter M
Hi There
We bought a property in June 2006 and start renting a room out in mid year of 2008 until now. we would like to know if we are able to continue to rent a spare room out and when we should stop it to be exempted from CGT.
Looking forward to hear from you.
Regards,
Jen
Hi. I own an investment which was purchased at the end of 2009. It is my only property and will be until its sold. I lived in the property for the first 6 months and plan to move in for a period of time before the property is rented for 6 years. What is a suitable amount of time I would need to live in the property before being able to rent it for another 6 years?
Hi,
I bought a unit in 2007 and lived there for approx 8 months, and then gave it for rent for 2.5 years. After 2.5 years, i have now moved back and lived there for a year. If i sell that property, will i have to pay CGT. Thanks
Regards,
Mathan
Hi. I currently have a property in joint names in Australia but live in the UK. The property has been rented for the last 15 years. I now want to sell it. Can you please tell me if I wanted to put it into just my name and then sell it what would the CGT be since I haven’t lived in the Australia for the last 13 years, but I’m still an Australian citizen. The house was originally in trust but when my father passed away it got transferred over to myself and the other person. I know want to sell it. Is it easy to have the other person taken off the deeds?
Hi we recently bought our second property (settlement April 2012), we also applied for Principle Place of Residence concession and was granted. We’re now thinking of renting it out as we plan to relocate overseas for 2 yrs. I understand we have to let State Revenue Office know. When we come back after 2 yrs we may decide to sell it, will we be entitled to full exemption of the CGT? thanks
Hi My wife (62)and I(66) have 5 houses that we hope to sell within the next 2 years. They have all been rented since early 90s and we are getting too old to manaage. We are hoping to buy some apartments after the sale which are much easier to manage. All properties are under our names (50% each) and each of them will make around 350k of profit. How do we minimise our capital gain tax? Are we old enough to get some exemption or concessions? Thanks and regards Kunal
Hi, I have bought a house and lived there for 3 years. Then I built another house on the back. Moved into the new house and made a major renovation/extension of the original house.
At the moment we live in the rear unit for 6 month.
The subdivision is not finalized and I’m wondering if I have to pay CGT if I sell a rear unit. What if I decide to rent it out?
When it is better to finalize the subdivision?
Thank you.
We are trying to understand our liability for CGT our house.
We jointly purchased our family home in April 2005 and then in September 2006 had to move overseas for work, and decided to rent the house out. I am still working overseas and will be not be returning until 2014. When we return to Australia we are likely to sell this house and purchase a house in a better area. I would like to understand does any of this exemption for 6 years apply for the time we were overseas.
Hi Cheyenne
Thank you for your enquiry. A member from our team will contact you shortly to discuss this matter.
Thank you and Kind Regards
hi, i bought my house on 05/1998 , and i live there untill 05/2006 then i rent out , now i want to sell it when the lease finish next year feb 2013 , do i have to pay cgt . thanks
Hi, We are thinking of renting our existing home and purchasing a new home to live in. Is it better to sell our own home rather than transfer it to a rental property?
Thanks
Jason
Hi,
In 2006 I purchased a property and lived in it for the first 6 months, moved out and rented it out until now.
Soon, it will be 6 years since I’ve started to rent my property out.
I’m thinking of moving in before the 6 years so I don’t get CGT in future when i sell my property, however, for how long should I move in and what kind of evidence should I provide to show that I have done so?
I don’t have any other property and this is my main residence, due to financial circumstances, I could no longer live in my property and had to move in with my parents.
Can somebody please help and provide information on CGT regarding this particular matter?
Thanks,
Liz
Hello,
I am in a pickle, I am in the Army and in 2002 I purcahsed a house, in 2005 I was posted out and have only returned to my house in 2012. I ahve rented the house ou int that duration. I did not leave the house by choice and I have not been given the option to return home for service reasons. Is there an exemption or something that I can do to avoid losing so much money in tax?
Your assistance would be appreciated.
Adam
Hi Adam
Thank you for your enquiry. What a pickle! Someone from our office will be in contact with you shortly to discuss your question.
Kind Regards
Hi,
I purchased a house in 2010 that I have as my primary residence (I do live there and have done since I bought it). A friend of mine has moved in recently and is insisting she pay me rent for the time she is there (likely to be up to a couple of years). I have asked her to hold off paying until I can get some advice.
What implications would this have for me in regards to tax & CGT? Do you know of any other legal obligations I would have – ie landlord insurance etc?
Hi Kylie
Thank you for your enquiry. Someone from our office will be in contact with you shortly to discuss your question.
Kind Regards,
Michael Quinn
Hi I bought a house in 2007 with 2 other members of the family I lived in it for 6 months then married and moved out the others members of the family paid rent and we all put in for the rest of the moraged i was able to claim a third of all bills and rent with ATO I sold my portion of the house to another family member in October 2011 I sold my share for $16000
the value of the house only went up by $80000 so that would be divied by 3 how much would I have to pay
Hi. I own an investment which was purchased at the beginning of 2008. It is currently my only property but I am settling on a house to live in mid August. I lived in the property for the first 6 months and would like to move into the property again to reset the capital gains. What is the exact amount of time I would need to live in the property to reset the capital gains tax? Also how do I later prove I lived there?
Hi. I purchased my family home in 2010. I have lived in this family home during this time. Recently I purchased a unit nearby and would like to move into this next week and rent out my family home that was purchased in 2010.
At the end of 2014 (2 years) I plan on selling the unit that I am about to move into and move back in my family home. Will the unit be subject to CGT?
I am confident my family home will not be as I plan on settling in the family home after 2014 for quite some time.
Matt
Hi, I own a house as first home buyer and stayed in it for two years.As I had to move interstate for work, I rented it out for more than an year.If I sell it now do I need to pay CGT.
Hi I would like to know if you can help me with some information i need I am thinking about to buying a house for a investment i allready have 2 others but this one i would like to rent out for the first 12 months and then move in myself for 12 months while i build one to permantly live how best do i do this to avoid capital gains tax if i decide to sell this house later down the track, also i have had the other 2 about 5 years now how do i avoid capital gains tax on those ones
How long is “an acceptable amount of time” as stated below?
“If your house is nominated as your sole dwelling, you can usually rent it out for six years while living elsewhere. Once that period of time has elapsed you must return to live in that house for an acceptable amount of time in order to be allowed another rental period of six years. “
Hello,
I am trying to figure out if a property I bought in 2007 (intially as my first property, however I had to move overseas immediately and ended up renting it and paying back the first home owner’s grant and stamp duty), can still become my first home if I move in within 6 years? Or at least if I can save on CGT if I do so. I am back in the country and able to move in, but only if it is worth it at this stage. I bought it in March 2007, settlement was in May. Some advice or direction as to where I can find information would be much appreciated.
Many thanks, Basia
Hi,
I purchased a property in 1997 and have lived in it ever since. I want to rent it out, move to a different area and rent a property there. If I decide I like the area, I would like to then buy a property in that area and sell my original property. This will all be decided and completed well within the six year rental period, so would I be exempt from CGT when I sell my original property?
Hi,
I am currently living overseas, our prime residence home was rented out in Jan 2009 since we moved overseas. In view of current CGT changes in house, do I still entitle to the 6 years grace period if i sell my house? Alternatively, do I still able to consider it as my prime residence if I move back to live for 6 months? We lived in the house since we bought it from day one.
Thanks
Hi
We bought our only house in. 2005. We lived there for 4 months before renting it out for 2 years while we rented interstate for work. We returned in 2008 and lived in the property for four years before renting it out this year while we rented ourselves somewhere closer to city. Can we now sell this house without moving back in and be exemt from CGT? It remains our only property.
Thanks
Hi,
My partner and I brought a unit while our house was being built and lived in it for a year, we now have it rented out and are living in our house that we built. We are looking at seeling our house in 6 months and moving back into the unit. We plan to live in the unit for a year then possibly sell, will be have to pay CGT on the unit when we decide to sell?
If I am looking at acquiring an investment property, rent it out for
6 years and then move in? What will the CGT consequences?
HI
My partner and I bought a property approx 12 years ago and we were not able to live in it due to work commitments in the city, then rented it out since purchase and we have paid rent (a lot more than the rental collected in our house) in the city to someone else. We had purchased this house to retire to in one more year. By living in the house after retirement for any length of time would we have to CGT on the whole time it was rented.
Hi
We have our own home. We bought this small piece of vacant land to build a investment property.
building will be starting within an year of buying the land .
We were told that we can interest on loans will be tax deductible.
Once completed we will rent it out.
My question is if after few years of renting if we choose to live in this house , will have liabilities to tax office for claiming the interest and other rates during period it was built and rented. David
Hi,
I rented out my property in February 2009 and moved overseas to live.
I am going to go back to Australia in September 2013 and live in my home for 6 months.
Will this ensure I do not pay capital gains tax?
Any help much appreciated.
Mark
Great post. I am experiencing some of these issues as well.
.
hi, I’ve bought 2bedroom apartment in 2009 as first home buyer on mortgage. Moved in right away with sister,girlfriend&her sister. Contact ATO, they confirmed that I can rent out master room to our sisters at market price to claim deduction. I did claim deduction,including mortgage interest&depreciation for tax return purposes. I won’t be charged for CGT as long as I rent it out less than 6 years,right?
Btw, my girlfriend also bought 2br apartment as first home buyer on 2009, rented out for a year, lived there for a year to full fill first home requirement,then we got married and she moved into my apartment last year. I understand we will be taxed for her property CGT.
Guess the question is about my property. We are thinking of taking another property for investment.
Thank you so much for your kindly assistance. Should you have any suggestion,please kindly advice.
Hi. I have recently bought a second property which I hope to move into, leaving the original property to be rented out as an investment property. How long do I need to leave it vacant for after 6 years to avoid CGT and reset the 6 year cycle?
Hi, my wife and purchased our first home in March 2004, we relocated in December 2011 for work opportunities and decided to rent out the house. We are currently renting the property we are living in and have decided to sell our house which is currently tenanted as we are ready to purchase our family home.
Could you advise if we will be exempt from Investment/CGT?
Hi, I purchased a property in Nov 2007 and immediately moved in for a period of 6 months before renting it out. I had it rented up until 2 weeks ago, total rental period 4.5 years. If I was to sell it now do I be need to pay CGT ?
Hi, my husband and I purchased in year 2000 a house near Coffs Harbour where I spent my childhood. The intention was to
return to Australia after retirement and to live in the house. Have rented the house out and have not been able to live there at all. After retirement I worked in Brisbane , having to live there with my sister to prepare for my return to Australia. My husband became ill and I had to leave Australia again. He passed away in 2010 and due to family obligations, our daughter was highly pregnant as he passed away and have had to take over responsibilities. Is it possible to still live in the house soon and to be exempt from CGT? Would like to sell and purchase in Brisbane where now most of my family live. What costs would be involved for advice from Quinns? I am travelling to Sydney late December and would prefer some advice before the flight. Yours sincerely Lorraine Buechner
Schillerstr.16 52445 Titz Germany
Hi,
I am interested in the response to Jason’s question above.
That is how long a period do you need to live in your main residence before renting it out, in order to still be eligible for the main residence exemption? (ie: 6 months or a year, is there any quidelines to this?)
Thanks.
Hi there,
Also interested in the answer to Jason’s question. Is it 6 months or no rules around how long?
Hi,
I was hoping for a little advice on cgt.
I bought my property in 2004 for $154,000 and lived in it for 1 year before renting it out. I have recently sold it for $325,000 but from this must pay agent and legal fees plus strata costs of $14,300 upon settlement which is due 30 jan 13.
I have heard cgt is reduced if you lived in the property before it was an investment but not sure if this is the case in my situation. The bank is taking away most of my left over profit for security against other loans and I really need to know what cgt I may need to pay with what I have left and I may not have enough!
I will have earned approximately $65,000 this financial year as a salary and I know this plays a part too.
Any help will be much appreciated.
Thank you
Hi,
Could you please advise the following.
I am going through property settlement as part of my divorce. We own our martial home and my husband has two investment (houses) properties. All acquired during the marriage.
If we sell our home and I take one of the rental properties as my residental home. Am I liable to pay CGT? The properties were under my husbands name. There is no loan on this property.
If I then purchase another home can I make this my residential home? and the acquired rental property from property settlement as a investment property. I want to take out a loan and use the acquired rental property equity to purchase another home that I would eventually live.
It sounds so confusing.
I hope you can help
Thanks
Hi Rose,
Thank you for your enquiry.
Someone from our office will contact you soon.
Hi.
If you rent out your principle home for less then 6 months, how long to you have to live back in it again before you can rent it out again?
Thanks, K
Thank you for your comment. Our office will be in contact with you shortly.
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Hi Sharron,
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Michael
Hi,
I have owned a property in Rozelle since 1998. I lived there for approx 9 years before purchasing and moving into a unit with my partner. We have been here @ 7 years. The Rozelle property has been rented for past 7 years.
We have good equity in both properties and are interested in purchasing a unit in the eastern suburbs, but would need to borrow against the equities we have. We would then rent out the unit we currently live in.
Could you please advise the implications for CGT and also whether we would be better selling one or both properties?
Thanks, Natalie
Thank you for your enquiry. Someone from our office will be in contact with you shortly.
Have done research, but it yielded contradictory or vague advice. Please advise on the following:
I bought my flat in 2001 and lived in it for 1 year (2001-2002). Then it was rented out for 2 years (2002-2004). Then I again lived in it for 2 years (2004-2006). Then it was rented out for 7 years (2006-20013). I have now moved back in. How long do I need to live in the flat before selling it without having to pay CG tax? Would be very grateful for a SPECIFIC number. Would it be possible for someone to reply on my email, please? Thank you!
Hello
I would like to know about the CGT and also yearly tax declarations.
I recently bought a house, it is my only house and I bought it for the sole purpose of living in it. Now, I am thinking of renting out just 1 or 2 of the rooms while I continue to live in it. What are the tax implications for doing this, because I haven’t found a clear-cut answer on the internet because most answers are usually for the owner not living in the house while it is rented out, but I will be. So is CGT and yearly tax declarations still necessary or am I exempt?
Mel
Hi Mel,
Thank you for your enquiry. Someone from our office will contact you shortly.
hey i would love some professional advice as i about about to purchase an off the plan unit in darwin and am considering purchasing it as a first home buyer, to live in for the first 6 months, and recieve my FHOG, however after such time i would like it to go into a lease agreement through a realestate agent and i am wondering that once the property is lease through a real estate it will clearly be for the purpose of investing and since i will have to pay income tax on rent earned is it then possible to claim the interest to the bank and body corp fee’s as a tax deduction, or if it is purchased as a First home, does that mean that all deductions are forever disregarded. and inturn would make more sense to buy the property directly as an investment property forfitting the FHOG. any assistance would be greatly appreciated
Hi,
Thank you for your enquiry. Someone from our office will get back to you shortly.
Hi Ross,
Thank you for your enquiry.
Guidelines for the FHOG is quite specific, please see http://www.osr.nsw.gov.au/legislation/budget/2012/newhome_faq/ .
Should you wish to have a more specific advice, please contact us on 1300 QUINNS to discuss your matter further.
Kind regards
Greetings! Very useful advice in this particular post!
It is the little changes that make the greatest changes.
Thanks for sharing!
We have to relocate from Maryborough to the Gold Coast for work purposes, the property market is not strong and to sell now would mean a loss (we own outright). Rather than lose money, we have decided to rent our home out and rent on the Gold Coast, we feel the rental income will pretty much offset the rent we will have to pay. What can we expect at tax time, and will we have to pay CGT if we sell when/if the market improves in the next 12 months.
Hi Kozlee,
Thank you for your enquiry.
In regards to your question, there are multiple considerations which will be based on whether it is strictly accepted to be a work relocation and timing if any, of the sale of you property.
Please contact us on 1300 784 667 (1300 QUINNS) should you wish to discuss your matter further.
Michael
Hi,
From what I can assertain my rental property is CGT exempt as I use to live there for 2 years only rented it out for two years, about a month ago I purchased some land but there is no house on there and I rent. However I am now looking at selling my property can I claim back real estate agent fee’s?
Hi
I have owned and lived in my family home in Victoria since 2002 (as a single parent) but moved to Qld and bought a house with my partner in 2012.We have 2 loans, one that he pays and the other that I pay but both loans are in both names for the Qld home.
The Vic home loan is mine alone.
I have rented my first home out to my son and his friends but have trouble making repayments on both loans as I only work casually so I need to sell the home in Vic.
I have kept my Vic license and mail at the Vic address even though most of my time is spent in Qld.
Please advise- what is capital gains tax and will I have to pay any? Thank you in anticipation.
Hi,
I bought my first house in 2002 where me and my family lived in it for 4.5 years. It has 4 bedroom. In 2007 I rented out 2 bedrooms out of the 4 to friends and claim it on my tax returned. Me and my family were still living in the house with my 2 friends.
This was for the next 7 years. My friends moved out in 2013.
At the end of 2014 we decided to move out and live with my mother and rent out the whole house but this house has always been our main place of residence since moving out in 2014.
In December 2013 we also bought an investment property and borrowed on the term that it was an investment property.
My question is:
1. Will I have to paid CGT on the 7 years between 2007 – 2013 that I shared my main residence with my friends if I were to sell my house.
2. IF NOT for question 1, Will I have to paid CGT for my main house of residence if I rented my house out for under the 6 years time frame, then moved back in and sell it after 6 months?
Hi Kim,
Thank you for your enquiry. We will be in touch with you shortly.
I lived in my unit for 12 months then rented it for 3 years to help pay the mortgage. I sold it and payed over 30g cgt this was 9 years ago. My question is if i have paid to much cgt how do i get back the overpaid money and how do i find out if i have over paid.
Hi Jasmine,
Thank you for your enquiry. Someone from our office will contact you shortly.