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Capital Gains Tax

Newbie

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Replies 2

Hi I have a question regarding capital gains tax on a residential property. The property is my Mothers, who currently in a nursing home. Its looking like she will not be able to return home due to various health reasons.

Mums house is being looked after by one of her Grand Daughters (rent free). Mum still has all her belongings in the house and still recieves all her mail at her house. I have been told that if Mum is not living in her house we will have to sell it before two years (not living in the house for a period of two years) to avoid paying capital gains tax, is this correct?

Thanks Flick

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Most helpful response

Devotee

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If your Mum is not using it to earn income and has no other property she can continue to treat it as her main residence indefinitely and not pay CGT.
If she earns income from it, you have a maximum 6 years before you need to sell it. Have a look on ato.gov.au to make sure these rules suit your scenario: https://www.ato.gov.au/general/capital-gains-tax/your-home-and-other-real-estate/your-main-residence...
2 REPLIES 2

Most helpful response

Devotee

Replies 0

If your Mum is not using it to earn income and has no other property she can continue to treat it as her main residence indefinitely and not pay CGT.
If she earns income from it, you have a maximum 6 years before you need to sell it. Have a look on ato.gov.au to make sure these rules suit your scenario: https://www.ato.gov.au/general/capital-gains-tax/your-home-and-other-real-estate/your-main-residence...

Devotee Registered Tax Practitioner

Replies 0

I have been told that if Mum is not living in her house we will have to sell it before two years (not living in the house for a period of two years) to avoid paying capital gains tax, is this correct?

 

No, but it sounds like how the age pension asset test is applied.