Hi there,
We bought a property in February 2020 which unfortunately had tenants with 3 months left on their rental contract, so we were legally not allowed to kick them out right away. After they finally moved out, we moved in right away as it was always supposed to be owner-occupied. We now lived there for over 3 years and are considering to sell the property as it has gone up in value a fair bit.
I understand that the 6-year rule would allow us to rent it out before selling it and still avoid CGT as long as we treat it as our PPOR. However, this raises a few questions:
1.
The rule states that a property cannot be used to generate income before you live there and that it does not become your main residence until you move in (although we did not have any other properties to declare as PPOR). Does that mean we have to pay CGT even though it was simply not possible to move in immediately and we had no choice but to keep renting it out for a few months? Or would that still fall under "as soon as practicable"?
2.
If the 6-year rule does not apply to us because of the tenants we "inherited", we might decide to sell directly without renting it out first. In that case, would we at least be eligible for partial CGT exemption and only pay CGT for the period when it was generating income (i.e. 3 months in 2020)? If so, how would the change in value over that period be determined if we did not get a new valuation after the tenants moved out (since it's only been 3 months and the value would have been pretty much the same)?
Thanks in advance!
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