So I was talking to a 'Senior Lending Consultant' at one of the big banks the other day and the topic of selling an existing investment property came up. He suggested something that doesn't sound right to me and I was hoping one of you might be able to clarify.
His suggestion was quite general in nature. He essentially said that anyone selling an IP should live in it for the last 6 months of ownership so it becomes your PPOR and therefore you don't have to pay ANY capital gains tax.
My understanding has always been that you would calculate the gains made while it was an IP and only pay tax on that figure, so this would exclude any gains accrued while it was your PPOR but you would still be liable for some tax. I've always believed that this is why you should get valuations done at each conversion stage.
Am I crazy? Or should this guy, at the very least, have the 'Senior' removed from his title.
Human beings go mad in crowds.. and come to their senses slowly and individually..
Ignore posts by The Whole Truth · View Post · End Ignoring The forum fuckwit goes RRRAAARRRGGHHhhh - But not a fuck was given..................by anyone.
So I was talking to a 'Senior Lending Consultant' at one of the big banks the other day and the topic of selling an existing investment property came up. He suggested something that doesn't sound right to me and I was hoping one of you might be able to clarify.
His suggestion was quite general in nature. He essentially said that anyone selling an IP should live in it for the last 6 months of ownership so it becomes your PPOR and therefore you don't have to pay ANY capital gains tax.
My understanding has always been that you would calculate the gains made while it was an IP and only pay tax on that figure, so this would exclude any gains accrued while it was your PPOR but you would still be liable for some tax. I've always believed that this is why you should get valuations done at each conversion stage.
Am I crazy? Or should this guy, at the very least, have the 'Senior' removed from his title.
If the house is a PPOR to start with your capital gains base is the value at the time it becomes a rental. If the house starts as a rental and then becomes a PPOR the capital gains is pro rata
If the house is a PPOR to start with your capital gains base is the value at the time it becomes a rental. If the house starts as a rental and then becomes a PPOR the capital gains is pro rata
Or I think you can get a valuation at the time it stops being an IP and you move in? (rather than just do pro-rata).
At any rate moving into your IP before you sell it does not get you out of paying CGT on the time it was an IP.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
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