G'day all..
Real quick question.. one of my mates wants to buy his first property, live in it, and rent out 2 rooms of a 3 bedroom property…. can he claim 2/3 of his expenses for tax purposes of an investment property? My thoughts are he can, but will get a bit messy come tax times…is it possible for him to use a property manager to rent out the 2 rooms and take care of all the payments? hope this makes sense, and I hope somebody can give me some help…cheers
tuggerIf you are declairing the income and claiming expenses, you must also take into consideration that when it comes time to sell the property it may attract capital gains tax.
If he is living in the property, there isn't any benefit in using a property manager and most wouldn;t do this type of arrangement. Plus they will take about ~8% of the rent and take a month to pay it to you. Alot easier for someone living in the same house to leave the money on the coffee table.
Many people in this situation if leasing rooms wont declare the income and claim no tax deduction. It is illegal, but the option most people go for.
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