I purchased an investment property in early 2021 as a means of getting back into the property market after a divorce. The property was operated as an investment property for 12 months, after which time I moved into the home with my spouse and our young child as our main (only) residence. After receiving a redundancy payout I discharged the mortgage last year. In September 2023 we added my wife to the title of the property (joint tenants). No money changed hands - the transfer was simply to give my wife and young son security of ownership in the event of my death. My accountant has advised that we triggered a CGT event and I am liable for any capital gain from the date of purchase until the date of change of title! This doesn't feel right to me (I didn't make any money/profit). Can anyone advise if my accountant is correct? Is it worth asking for an individual ruling?
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Well, you certainly triggered a CGT event because you disposed of half of your property to your spouse. This link explains
Transferring property to family or friends | Australian Taxation Office (ato.gov.au)
This property was income earning for 12 months before you moved in so this is the period that is subject to CGT. The period it is your main residence is not subject to CGT.
CGT would be calculated from date of purchase until transfer of 50% to spouse. This would then be apportioned by the days the property was rented to get the total gain. (discount by 50%)
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Well, you certainly triggered a CGT event because you disposed of half of your property to your spouse. This link explains
Transferring property to family or friends | Australian Taxation Office (ato.gov.au)
This property was income earning for 12 months before you moved in so this is the period that is subject to CGT. The period it is your main residence is not subject to CGT.
CGT would be calculated from date of purchase until transfer of 50% to spouse. This would then be apportioned by the days the property was rented to get the total gain. (discount by 50%)
@Taxduck Thank-you for your advice. Is there any way I could have done this (added my wife to title) without incurring a CGT liability? i.e. What did I do wrong?
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