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Main Residence Exemption – First Used to Produce Income

When it’s time to upgrade your main residence and start renting out your old main residence, you can set your cost base in one of two ways:

  1. Calculate the purchase price, any holding costs and capital improvements whilst the property was your main residence; or
  2. Get a valuation at the time the property is first used to produce income.

Option 2 is usually the best scenario however only works if the property was your main residence first.

Option 2 does not work if the property is an investment property, then a main residence and then a rental property again.

Please contact us if you would like to discuss further or have any questions.

The information in this blog is intended only to provide a general overview and has not been prepared with a view to any particular situation or set of circumstances. It is not intended to be comprehensive nor does it constitute advice. While we attempt to ensure the information is current and accurate we do not guarantee its currency and accuracy. You should seek professional advice before acting or relying on any of the information in this blog as it may not be appropriate for your individual circumstances.

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