Tax Q&A: Your Tax Questions On CGT Rules Answered

Restarting a CGT-free period

 

Q: If I have exercised my exemption under the six-year rule and am now returning to stay in my unit, what is the minimum period I have to stay in my unit before I can once again rent it out under the six-year rule? This is my only principal place of residence. Your reply would be benefi cial to others in a similar situation.

 

A: Provided that you move back into your unit prior to the end of the six-year period of using your unit for income-producing purposes and then occupy your unit for a reasonable period (there is no minimum period in the Tax Act; however, it is always on a case-by case basis and must satisfy the reasonable period and intent test); and provided you can show evidence that you have in fact physically moved into and occupied your unit (for example, evidence of water/council rates, utilities, electoral roll records, etc, would generally suffice), then you will preserve your CGT-free exemption on your unit if you ever sell it in the future.

 

There is no defined minimum period in the legislation; however, as a general guide, in addition to what is a reasonable period, I would suggest a minimum of six months plus genuine intent should be OK.

 

– Angelo Panagopoulos

Angelo Panagopoulos - Your Tax Questions On Selling A Property And More

 

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Tax-QandA-Feb-2016