In June I sold an apartment that I had been renting out. I lived in the property for three years before turning it into a rental property. However, I wasn't aware that to work out CGT I needed a market valuation from when I started renting it out (I thought it was just calculated as a portion of the time it was rented vs lived in).
How would I work out in historical market value for a property? Is it even possible? What if I can't?
For reference, below is the example they use on the ATO site stating that market value at time of renting is needed.
Example: home becomes a rental property
Erin bought a house in July 2012 for $450,000.
- The house was her main residence until she moved into a new house on 1 August 2023.
- On 2 August 2023 she began renting out the old house.
- At that time, the market value of the old house was $650,000.
Erin didn’t want to treat the old house as her main residence under the ‘continuing main residence status after moving out’ option as she wanted the new house to be treated as her main residence from the date she moved into it.
In June 2024 Erin sold the old house for $696,000. Erin is taken to have acquired the old house for $650,000 on 2 August 2023 and calculates her capital gain to be $46,000.
Because Erin is taken to have acquired the old house on 2 August 2023, she is taken to have owned it for less than 12 months and can’t use the CGT discount to reduce her capital gain.
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