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Re: Main residnece becoming a rental property

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Hi,

I've been looking for the answer to this for a while but I cannot get a clear answer.

We have been living in our house for the past 3 years and have made significant improvements through rennovations trying to make it our forever home. This means the house is easily worth more than $100,000 than we originally paid for it.

Due to a change in work we now have to move out but we want to hold onto our property and use it as a rental (as we might want to come back to it in the future).

Because we increased the value of the property whilst it was our main residence, if we have to sell the property after it has been used for income generating purposes does the capital gains calculate from when we bought the property or can we get it officially valued before we move out and calculate our captial gains from the value of the property from the time it became income generating?

Tahnk you for your help.

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TaxTime Support

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Hi @RozzieD

 

Welcome to your first post on our community.

 

Thanks @macfanboy good help.The home first used to produce income is the rule that allows you to value it when first used to generate income.

 

Of course if you elect to have your main residence exemption stay with this home under the 6 year absence rule if you sell or move back into it within that 6 year period it will remain exempt from capital gains tax.

 

Hope this has helped.

 

Regards
MarkA

 

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Devotee

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The cost base will be when it first was used to generate rental income.

Get a Valuation

 

and a Quantity surveyor to give you a report for Capital works depreciation claims on the building and improvements.

Best answer

TaxTime Support

Replies 0

Hi @RozzieD

 

Welcome to your first post on our community.

 

Thanks @macfanboy good help.The home first used to produce income is the rule that allows you to value it when first used to generate income.

 

Of course if you elect to have your main residence exemption stay with this home under the 6 year absence rule if you sell or move back into it within that 6 year period it will remain exempt from capital gains tax.

 

Hope this has helped.

 

Regards
MarkA

 

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