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Capital Loss Second Home

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Newbie

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Replies 4

My husband and I purchased a second home which I lived in during the week for 3 years while working away.  We managed to make a loss on this house when we sold it (taking into account renovations etc). Do we report it in our Tax Returns?

 

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Most helpful response

Devotee

Replies 2

You can only claim a CGT exemption for one property as your main residence at a time. As you have two properties you need to assess which one you claim the main residence exemption for and which one is an investment that you will pay CGT on. 

 

It it sounds like you were treating the second property as your investment perhaps, so have a look at how to calculate your CGT on this property. If you made a loss on the sale of this property you can use this to reduce other capital gains. If you have no other capital gains you can carry forward this loss forward for future years. 

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Taxicorn

Replies 0

Yes, you should.

 

The loss will be carried forward and used against any gains you may occur in the future.

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Most helpful response

Devotee

Replies 2

You can only claim a CGT exemption for one property as your main residence at a time. As you have two properties you need to assess which one you claim the main residence exemption for and which one is an investment that you will pay CGT on. 

 

It it sounds like you were treating the second property as your investment perhaps, so have a look at how to calculate your CGT on this property. If you made a loss on the sale of this property you can use this to reduce other capital gains. If you have no other capital gains you can carry forward this loss forward for future years. 

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Newbie

Replies 1

Thanks wonka - second home was just that. I knew if we made a gain it would be an assessable Capital Gain.

So you think we can claim a Capital Loss on the second home? Not a Personal Use asset?

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Community Manager

Replies 0

Yes that is right.