Assignment Task:
Required: Discuss the CGT consequences of Miriam selling her house (citing authority where appropriate). You are not required to discuss the application of the 50% CGT discount, or the impact of Division 43 of the ITAA 1997 (4 marks).
Miriam lives with her parents. Using borrowed money, she buys a house (the first one she ever bought) from her brother on 1 March 2020 for $300,000. At the time, its market value was $350,000. Miriam pays stamp duty of $20,000 on the house. She immediately rents it out.
On 1 March 2021 Miriam decides to move into the house. At the time it was worth $500,000. She then sells it on 28 February 2023 for $900,000.
For the time Miriam owned the house, she paid $30,000 in total in interest: $10,000 of this was attributable to the time she rented out the house and $20,000 of this was attributable to the time she lived in it.