CGT question

[movingtoaus]

We are planning to move to Aus in 2016. We were granted PR visas in 2011. I am planning to keep my house which I bought in 2007. I read somewhere that if you leave SA on a PR visa you trigger CGT on your house. Is the capital gain calculated between 2007 and 2011 or between 2007 and 2016 ?

Would appreciate it if someone can asist me.

[EmNew]

Hello movingtoaus,

The base cost for CGT would be the date of change in use - ie when you move out of the property as your primary residence and start renting it out. I would suggest that you get a market valuation done at that date, so that when you do eventually sell the house, you use that as your base cost. Otherwise, if you don't have the valuation done, the base cost will be the 2007 actual costs, plus additions, etc, which could mean that the profits on which CGT is based upon sale of the property would be greater. You won't trigger a CGT event merely by leaving the property to come over to Australia if you keep it and rent it out. The CGT event would only be when you sell the property at a later stage. CGT will kick in as your primary residence exemption for CGT tax would fall away, due to the change in use.

If you are planning to emigrate financially, you would have to dispose of the asset, thus triggering the CGT event at that point.

Hope this clarifies this for you a little?

Edited November 26, 2015 by EmNew

[Tiermelk]

"

You will be treated as having used your primary residence for domestic purposes despite letting it for a rental if –

• you were absent from the residence for a continuous period not exceeding five years;

"

Have a look at this document from SARS http://www.sars.gov.za/AllDocs/OpsDocs/Guides/LAPD-CGT-G02%20-%20The%20ABC%20of%20Capital%20Gains%20Tax%20for%20Individuals%20-%20External%20Guide.pdf

[movingtoaus]

Many thanks Tiermelk and EmNew. I really appreciate the info.

I will read through the SARS document.

Just a few questions for EmNew.

1. Who should do the property valuation for me ?

2. It seems that there are different ways to emigrate i.e financially etc. could you please give me more information on the different ways ?

3. Does a permanent resident visa force me to emigrate in a certain way, for example financially ?