Hi Peeps
My girlfriend and I spent most of last year over in the UK (working). Whilst we were away, we rented out our house in South Brisbane (having lived in it for the 2 years prior to leaving). So, the question is….Is this house viewed as an investment property in the eyes of the ATO, and therefore qualify for tax benefits, or does it still fall under the Primary place of residence banner????
Any thoughts.
Fully deductible as an investment property since rented out but no capital gains tax for 6 years or until you get a new PPOR.
The Mortgage Adviserhttp://www.themortgageadviser.com.au
If you were using it as PPOR for part of the financial year, you need to deduct expenses during this time from the full year’s expenses (as non-deductible) while remaining expenses as IP are deductible.
Cheers for the help people!
Yes I think you get to have your cake and eat it too. ie it can be both a rental and still be classed as your PPOR – if you are not claiming another residence as a PPOR.
Check this with your accountant.
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
Can anybody provide a reference to an ATO document or something I can read regarding nominating a rental property as your PPOR for 6 year to remove CGT?
I am in a similar position and am having trouble finding information.
Thanks
Damo.
Try section 118-145 of the Income Tax Assessments Act 1997
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
try http://law.ato.gov.au/atolaw/view.htm?locid='PAC/19970038/118-145'#118-145
SECTION 118-145 Absences
118-145(1)
If a *dwelling that was your main residence ceases to be your main residence, you may choose to continue to treat it as your main residence.
118-145(2)
If you use the part of the *dwelling that was your main residence for the *purpose of producing assessable income, the maximum period that you can treat it as your main residence under this section while you use it for that purpose is 6 years. You are entitled to another maximum period of 6 years each time the dwelling again becomes and ceases to be your main residence.
118-145(3)
If you do not use the *dwelling for that purpose, you can treat it as your main residence under this section indefinitely.
118-145(4)
If you make the choice, you cannot treat any other *dwelling as your main residence while you apply this section, except if section 118-140 (about changing main residences) applies.
Example:You live in a house for 3 years. You are posted overseas for 5 years and you rent it out during your absence. On your return you move back into it for 2 years. You are then posted overseas again for 4 years (again renting it out), at the end of which you sell the house.
You have not treated any other dwelling as your main residence during your absences.
You may choose to continue to treat the house as your main residence during both absences because each absence is less than 6 years.
You can make this choice when preparing your income tax return for the income year in which you sold the house.
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
Nice one, cheers for the help peeps.
That ato link will become a bookmark.!
Come on guys… you got the information from the internet so it must be true. What else do you need?
The Mortgage Adviserhttp://www.themortgageadviser.com.au
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