Does your home consist of 2 titles?

Does your home consist of 2 titles?

If your primary residence is made up of two titles, you may have still been able to claim a principal place of residence (“PPR”) exemption for both if they are “contiguous” and satisfy a number of conditions. For example, think about garages, tennis courts, swimming pools or gardens that are on a separate title but adjoining the home title.

The exemption does not apply if the adjoining land contains a building, such as a house or granny flat, though a building without all the amenities of an ordinary home, such as kitchen and bathroom, is not considered a separate residence for the purpose of the exemption.

From 1 January 2020, this exemption will no longer apply in Metropolitan Melbourne, though exemptions will still exist for apartments and their car space and storage lots if separately titled.

It may be possible to consolidate such land into one title, however such consolidation would have to be registered by 31 December 2019 at the titles office for the PPR exemption to continue to apply for both titles in 2020. Capital gains tax consequences should also first be considered prior to a consolidation.

The changes will not affect a principal place of residence and contiguous land that are wholly located in regional Victoria.

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