seeking advice please. Owner built current PPOR 3yrs ago and built another house which we shifted into for 6 mths and rented PPOR out as holiday rental. Looked at selling 2nd house but flattening market so have 1 yr rental currently. Now looking at putiing back on market as is neg geared and want to move onto next project. If we sell are we able to claim as PPOR and what are the tax implications as not 100% sure.
thanks
If you have lived in the house before renting out, then you could probably claim it as being your PPOR for the whole time. If rented first, then only could claim from the date of first living in it.
BUT (and there is always a but) you can only have one PPOR at one time. So if you were to ever sell the other house, you could not also claim that was your PPOR for the same period.
ps. I am not an accountant
Terryw
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Thanks for info Terry. We are intending to hang onto the original PPOP we first built as it is in great location and still I think has huge potential for future CG as in coastal location so I guess this may mean we could claim other as PPOR in meantime if we sell. Still tossing up our options, we would like to continue to invest in this area and hang onto IP however have a bit of cash tied up in it so am concerned about cashflow although probably have about 200k equity in both. Any ideas on where to next?
You can probalby get away with calling it your PPOR as Terry said if you didn’t calim any of theinterest or show any of the income on your tax return.
If you did (whihc technically you should have done, although it may have been to your benefit not to do) then it’s best to show a capital gain for the six month period that it was rented. The best way to do that would be to have had it valued when you moved out and to have had it valued prior to moving back in again. Alternativley you could have a Quanitity Surveyor do this after the event.
I htink what you should do and what you probalby could get away with are two different things and your choice.
PK
Thanks for input Pk
Have decided that we are going to keep both properties and stickmout for long term although it will tie up cash flow as neg geared but am looking at purchasing another IP ASAP.
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