Are there any costs associated with turning youre house into an investment property and buying another house to turn into youre ppr?
Just moving costs!
Be aware that you cannot increase the loan on your current home and claim the interest if the money is used for the new home.
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
No additional costs, but if your old PPR was your PPR for the entire time you owned the property up until it became available for rent, you can obtain a valuation of the property when it first becomes available for rent. The value becomes your cost base for CGT purposes for when you sell the property rather than what you paid for it. For example, if you purchased the property for $300k 3 years ago, and then converted the property to an investment property 2 years later when the property was worth $370k, the $370k is your cost base for CGT purposes, not the $300k.
I am told that you can rent out your PPR and rent a property fro a similar purpose,The benefit you get back could be up to/more than about $26,000 ,I envisaged thsi to be the sort of deal where really both rents equal out and you end up basically with your normally home loan but with a bonus of Approx $26,000 extra tax at the end of the year?????? tax is not my forte
Any Help
ibis69 wrote:I am told that you can rent out your PPR and rent a property fro a similar purpose,The benefit you get back could be up to/more than about $26,000 ,I envisaged thsi to be the sort of deal where really both rents equal out and you end up basically with your normally home loan but with a bonus of Approx $26,000 extra tax at the end of the year?????? tax is not my forte
Any Help
Yes, s118-145 of the ITAA allows you to rent out your main residence and still treat it as your main residence for up to 6 years. This means you can keep it free from CGT while still being able to claim all the normal expenses such as rates, depreciation etc.
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
Terryw wrote:ibis69 wrote:I am told that you can rent out your PPR and rent a property fro a similar purpose,The benefit you get back could be up to/more than about $26,000 ,I envisaged thsi to be the sort of deal where really both rents equal out and you end up basically with your normally home loan but with a bonus of Approx $26,000 extra tax at the end of the year?????? tax is not my forte
Any Help
Yes, s118-145 of the ITAA allows you to rent out your main residence and still treat it as your main residence for up to 6 years. This means you can keep it free from CGT while still being able to claim all the normal expenses such as rates, depreciation etc.
You are right, but what if you purchase another PPR – you then have to choose which property to apply the PPR exemption to – that is why I made the suggestion regarding obtaining a valuation at the date the property became available for rent – it "uplifts" the cost base.
I meant that,,I move out of our PPR ,,rent that out for say$300 a week rent another premises within our margin of $ 300-$350,,claim back interest,,I have only one home loan and in effect can I also claim depreciation on the building up to 40 years and on the single items,,,,plant etc,,,,,,,,say my depreciation is $7000 because it is a new home,,,can I claim teh full amoutn or is it my taxable amount of 30% of that $7000??????
Cheers
Damianibis69 wrote:I meant that,,I move out of our PPR ,,rent that out for say$300 a week rent another premises within our margin of $ 300-$350,,claim back interest,,I have only one home loan and in effect can I also claim depreciation on the building up to 40 years and on the single items,,,,plant etc,,,,,,,,say my depreciation is $7000 because it is a new home,,,can I claim teh full amoutn or is it my taxable amount of 30% of that $7000??????Cheers
DamianIf you are renting a property out you can claim all expenses associated with that property. Including depreciation on building and fittings and loan costs and maybe even travel costs. You can still class it as your main residence for up to six years (and still claim everything).
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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