We bought our current PPOR in 2022, however we intend to eventually move into our IP (which we bought in 2019) around 2023/24. The IP is purchased with existing tenancy. Prior to moving into the IP, our intention is to sell our current PPOR to fund an extensive renovation on the IP.
To confirm my understanding of the tax implications,
- Sale of our PPOR is CGT exempt
- Future CGT for the sale of the future PPOR/current IP is calculated pro-rata based on total days it was as an IP/total length of ownership
- Renovation costs will be offset against the capital gains calculations
However this does not seem fair, as the capital gains that are a result of the renovations (which is for the future PPOR) will also be taxed albeit pro-rata?
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1,555 views
2 replies