How is the CGT worked out when you sell your home?
Q.
We bought an investment home in December 2000 and it was rented
out until June 2003 at which time we moved into it. We intend to
sell the home this year. How will the CGT be worked out? I believe
that we qualify for the 50% deduction. I would like to know how the
value of the house is determined for CGT purposes - is it the value
of the house when you purchased it or the value of the house when
you moved into it?
A.
You qualify for the 50% deduction, because you have had it for
more than one year. The CGT will be worked on a time basis. So if
you owned it for eight years and rented it out for three years you
would be liable for CGT on 3/8 of the net gain.
Each week financial advisor Noel Whittaker answers your
questions.
