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gingerwong706(Initiate)Initiate
1 Oct 2024

My client purchased an apartment and rent one of the bedrooms to his friend, ie around 50% of the space, with another 50% self occupy. One year later, he rented out the whole apartment entirely. Three years later, he sold out the premises. Q1) How to calculate his CGT on this property ? ie if he can get 50% main residence exemption ? Q2) When calculate the cost base, if he can include cost of owning eg rates, insurance premiums, loan interest etc. if these expenses had not claimed tax deduction before. Q3) If yes, if these cost of owning need to be apportioned or can be included entirely ? Thanks

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215 views
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Taxduck(Taxicorn)Taxicorn
2 Oct 2024

Link explains the tax treatment of your main residence that was income producing before you move out

Treating former home as main residence | Australian Taxation Office (ato.gov.au)

So 50% of the residence can be treated as exempt under the main residence exemption 6-year rule.

Can't include amounts in the cost base that are deductible even if they had not been claimed off rental income. See cost base amounts not included.

Cost base of assets | Australian Taxation Office (ato.gov.au)

Only way to include these as an expense is to amend prior year returns


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Most helpful reply

Taxduck(Taxicorn)Taxicorn
2 Oct 2024

Link explains the tax treatment of your main residence that was income producing before you move out

Treating former home as main residence | Australian Taxation Office (ato.gov.au)

So 50% of the residence can be treated as exempt under the main residence exemption 6-year rule.

Can't include amounts in the cost base that are deductible even if they had not been claimed off rental income. See cost base amounts not included.

Cost base of assets | Australian Taxation Office (ato.gov.au)

Only way to include these as an expense is to amend prior year returns


gingerwong706(Initiate)Initiate
2 Oct 2024

Thanks. About Q2) may i clarify when calculate the cost base, 3rd element Costs of owning the CGT asset that are not tax deductible against rental income, for examples rates, interest on loans that were incurred during self occupy period etc. Can he claim these as 3rd element when calculating the cost base as costs of owning ? Appreciate your advice. thanks

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