Could you tell me the CGT tax implication?

Q.

We bought a villa in December 2000 for $239,000. We lived in it until February 2002 and then rented closer to work and the kid's school. The villa was rented out in March 2002. In 2004, we bought a unit to live in, and the villa was valued at $360,000 as we used it's equity to buy our unit. We are now unable to service two mortgages, and are thinking of selling the villa for around $360,000. Could you tell me the CGT tax implication? Are we able to claim the villa as our principal place of residence up until we bought another property to live in? We have a depreciation schedule done for the villa. I've read that I will need to repay the depreciation claimed when we sell the property, is this correct? Is there a 50% concession for this, since we lived in the villa?

As more than six years have elapsed since you moved out of the villa you have lost the option of treating it as your principal place of residence. Therefore, you will be liable for CGT on any increase in value from the date you moved out of it. The situation may be different if you had moved back into the villa, but this does not appear to be the case here. Make sure you discuss this with your accountant in detail before you sign any contracts. There will be an adjustment for the depreciation claimed and you will be eligible for the 50% discount.