Are there any hints and tips we should know about when changing a property from PPOR to IP. Being newly weds we have one, maybe 2, (we are contemplating nicking off interstate and renting both out) extra houses to rent out. One has been my PPOR the past 3 ½ years, the other has been hubby’s. Are there any particular tax implications or anything? We are still a tad undecided about mine as we are considering selling it so that I won’t have to pay any CGT.
I am assuming that if we rent, the CGT only counts from it’s valuation at the time of tenancy rather than the time of purchase. But that the one year rule is from the time of original purchase. Yes???
Thanks in advance,
Fibejebe
[8D]Fibejebee
I’m unsure how it works if you both have a PPOR, however I think you can both claim it as PPOR when selling if you don’t buy another house to claim.
Does that make sense?
You can rent your PPOR for up to 6 years whilst still being CGT free. (But you can only have one PPOR at a time, except for a 6 month ‘changeover’ from one to the other).
Cheers
Mel
FibejebeeI’m unsure how it works if you both have a PPOR, however I think you can both claim it as PPOR when selling if you don’t buy another house to claim.
Does that make sense?
Kinda. If we both move to SA and stay in rental accommodation ourselves, then technically we do not have a PPOR. So we can both call our existing houses PPOR’s as (at this moment) neither of them have been rented. Is that the jist of it?You can rent your PPOR for up to 6 years whilst still being CGT free. (But you can only have one PPOR at a time, except for a 6 month ‘changeover’ from one to the other).
Cheers
Mel
Hmmmmm. I think this is one that we need to run by an accountant. Thanks heaps for your response but I am still a bit confuddled about the whole thing.Fibejebe.
Kinda. If we both move to SA and stay in rental accommodation ourselves, then technically we do not have a PPOR. So we can both call our existing houses PPOR’s as (at this moment) neither of them have been rented. Is that the jist of it?Yes, and if you don’t buy a house to live in, you can both claim your houses as PPORs for up to 6 years complete with tenants. If you sell in the 6 years, no CGT. If you move back in after 5 years 11 months and live, you can then move out for another 6 years and no CGT (still not purchasing a house to live in and calling it PPOR).
The 6 month changeover is where you live in your house, and purchase another before selling your current one. Then you have 6 months in which to sell it.
Definitely talk to an accountant, but you could be onto ‘a good thing’.[
]Cheers
MelBoth claim?
We have only been married 10 weeks. Lived the first 7 at my place and the last 3 at his. Neither have been tennanted. In fact, we still even have phone connections at both. This sounds too good to be true. Especially if we nick off to SA as we do not want to have to pressure sell either place before we go.
Fibejebe.
Yes, and if you don’t buy a house to live in, you can both claim your houses as PPORs for up to 6 years complete with tenants. If you sell in the 6 years, no CGT. If you move back in after 5 years 11 months and live, you can then move out for another 6 years and no CGT (still not purchasing a house to live in and calling it PPOR).Cheers
MelBoth can claim is my understanding, but as I said, definitely check with your accountant.
Cheers
MelThanks Mel. [
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If we both claim, does that limit the tax advantages we can also claim for the properties? Depreciation. Interest etc. Both will be cashflow positive so we would like to offset some of the income with tax claims.
Fibejebe.
Both can claim is my understanding, but as I said, definitely check with your accountant.Cheers
MelI don’t know about both of you being able to claim a PPOR. I beleive that each couple can only have one PPOR between them, and have even heard of people pretending they were separated so they could save tax (or evade tax?). You had better talk to an accountant about this, but you can probably claim a PPOR each up until you become a spouses (defacto?).
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terry,
We will check it out officially. Would hate to end up with a big tax bill down the track ’cause we stuffed up at this point.
Fibejebe.Fibejebe, that’s ok, and please let us know the answer!
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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