Ok so what about doing it 100% legal and legitimate! i.e.:
I am paying of a property, my friend in the same neibourhood is doing likewise.
We decide to ACTUALLY SWAP, as in I REALLY DO live at his residence and he REALLY DOES live at mine. In both cases we each pay each other THE SAME amount of rent.
In this way we both have a legitimate claim for most costs and improvements as we are renting out our properties and NOT living in them. As in both cases we would be spending around $100,000 + over the next 2 years improving both properties, would this make sense to do (actually swap homes) given we can claim such improvements. Even if we cant claim it all back at once but have to spread it out via depreciation or whatever?
For me if it was cost effective to do this I would definitely move out, for a few years anyway.
Peter
It should work as a way to claim extra deductions early on and to save tax. But you may lose the CGT exemption and it may end up costing you more than you save in the long run, if not done properly.
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
I have a couple of similar queries…
1. If you live in a house and claim it as your PPOR, then move out for six years, can you claim deductions such as interest and rates etc. or do you forgo these to maintain your CGT exemption (the latter I would expect)2. I recently bought a house with my fiance. My name is on the title and mortgage, but it is understood we have 50% share in equity and ongoing costs. I charge her market value rent over the whole house (which approximately equals mortgage etc costs). I live at both properties at times. Can I claim deductions on this property?
(I live with my fiance to be close to work, and spend a lot of time at my previous PPOR – which I wish to maintain as my PPOR, as I may sell it shortly, or we may return there to live later).
We don’t intend to sell the shared house any time soon.Sorry if this sounds a bit confused[blush2]
Thanks
Dallas“If you look long enough into the void the void begins to look back through you.” Nietzsche
PC
If you improve it…its a capital expense and ‘not’ tax deductable isn’t it..you can only *repair* it so how can you have a legitimate claim for improvements??DallasM
1- if you move out and it becomes an IP of course you can claim the interest and costs, as far as CGT Exemption, it will be apportioned (where are you going to live while this happens; remember you can only have 1 PPOR at a time)
2-again, you can only have 1 PPOR..your accountant will be able to assist you further and you’ll speak to him soon anyway as today is the last day of the F- Year .
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorOriginally posted by dallasm:I have a couple of similar queries…
1. If you live in a house and claim it as your PPOR, then move out for six years, can you claim deductions such as interest and rates etc. or do you forgo these to maintain your CGT exemption (the latter I would expect)2. I recently bought a house with my fiance. My name is on the title and mortgage, but it is understood we have 50% share in equity and ongoing costs. I charge her market value rent over the whole house (which approximately equals mortgage etc costs). I live at both properties at times. Can I claim deductions on this property?
(I live with my fiance to be close to work, and spend a lot of time at my previous PPOR – which I wish to maintain as my PPOR, as I may sell it shortly, or we may return there to live later).
We don’t intend to sell the shared house any time soon.1. You can claim the expenses and negative gear and get to keep the CGT exemption if you are not claiming another main residence at the same time.
2. I suspect you could claim this property (or 50% of it) as you are the sole owner, and your friend is ‘renting’ from you. You would have to charge market rent though. I am not sure how the ATO would look at renting from a fiance – do you declare her as your spouse?
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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