Calculating capital gains tax for a former residence

By George Cochrane
Updated June 18 2017 - 9:43am, first published May 26 2017 - 7:48am

I bought my residential home in 2001 for $300,000, the current value is about $900,000. During the first year of living in the house I made many renovations that would have increased the value substantially, such as replacing all the down lights, new paving, updating the kitchen and bathrooms. Unfortunately, I have not kept all the invoices. I moved into my partner's house and rented out my house in 2014. Looking back, I should have had my house valued by a qualified valuer at that time. I am intending to sell my house in five years' time. I understand there will be capital gains tax (CGT) payable pro rata for the period when the house was rented out. My question is what action should I take now in order to take into account the improvements I have made to minimise the CGT? Would I be able to avoid CGT in the future if we moved back and lived in my house with my partner and rent out her house at the same time within the six years' tax-free period? Is this a good strategy? P.S.

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