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Re: CGT clarification

Newbie

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I purchased a house in 2014 for $980k. I rented it for 1 year. 3 months before I moved back in I had a valuation at $950k. 
I then moved in, made $300k of improvements and sold in 2019 for $1.55m. 
Do I pay CGT, as the valuation was lower than purchase at the time I made it my principal place of residence? 
thanks

kim

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Taxicorn

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@LuskyK 

 

As it was initially an Investment property for 1 year then there would be some CGT.

 

Cost base would be purchase price plus buying costs + selling costs + capital improvement.

Cgt would be (Selling cost - Cost base) x 20% (1 year out of 5 years ownership) / 50% (owned for more than 12 months.

 

However, You could also add back to the cost base all the 3rd element costs of owning (during your 4 year stay) which will reduce this even further.

https://www.ato.gov.au/general/capital-gains-tax/working-out-your-capital-gain-or-loss/cost-base/ele...

 

 

 

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Most helpful response

Taxicorn

Replies 0

@LuskyK 

 

As it was initially an Investment property for 1 year then there would be some CGT.

 

Cost base would be purchase price plus buying costs + selling costs + capital improvement.

Cgt would be (Selling cost - Cost base) x 20% (1 year out of 5 years ownership) / 50% (owned for more than 12 months.

 

However, You could also add back to the cost base all the 3rd element costs of owning (during your 4 year stay) which will reduce this even further.

https://www.ato.gov.au/general/capital-gains-tax/working-out-your-capital-gain-or-loss/cost-base/ele...