Principle Place of Residence and CGT

[jjjj]

I recently purchased my first home and I am having a bit of a dilemma. The place is a unit under a body corporate.


I received the first home owners grant for this and I intend to make this my principle place of residence as it is a property that should have good capital growth relative to rental cash flow.


However, I do not want to live in this house once settlement occurs. I want to rent the unit out.


Now, to pay no Capital Gains Tax on this property by claiming it as a principle place of residence once I sell is it true that you have to live in it for the first 6 months after settlement? Or is it fine to live in it in any 6 month period in the first 6 years?

ps, I know you have to hold on to the property for more then 12 months to be CGT exempt if it is your principle place of residence.


I do not want to pay any Capital Gains Tax, if I was to rent it out for a couple of years but move in for 6 months in the first 6 years is that fine? Or does it have to be the first 6 months after settlement?


Apparently if you move in for a 6 month period within the first 6 years you can claim a pro rata principle place of residence Capital Gains Tax exemption for the time you were living in it? Is this true? I do not want this to happen once I sell. I do not want to pay any CGT on this . Does this mean I have to move in as soon as settlement occurs?

How does a place get registered as a Principle Place of Residence?


Would this also mean I would lose my first home owners grant if I did not move in on settlement? Or does the same 6 year period rule apply?

[Konfrendo]

Hi Mate.

I am New in Property as well and I bought my unit just before 8 months.

I know that to get first home buyer grant you need to following requirement.

you Must live in the property as your principal place of residence, for continuous period of at least six months, commencing within 12 months of settlement or completion of construction of the home.

more info can be found at http://www.firsthome.gov.au/

When I bought my unit I rented out it for three months and then I moved in.

Hope fully that will help a bit.

Frendo

[rebel25]

I have a number of ip's

my advice is get the fhog, live in the place and dont worry about the tax.

Its bit like saying you dont want to work overtime cos the tax rate is too high. Paying tax means you made money

Focus on the positive and buy more homes, check out nras homes especially in tassie, they are cf positive, come with 10 year guaranteee lfrom fed govt have low entry (start from $235k and return $351 per week) and hobart has highest capital growth of any capital city in last 10 years!!!!