hi all, im new to investing and i have what might be a silly question, i brought and own my home which i moved into in may,i am in the process of buying a investment townhouse in sydney,i am thinking of moving to sydney around xmas time and i am wondering would it be better to rent my melb home for 250p/w and rent the sydney home for 340p/w which combined would cover repayments and go rent something cheap for myself or would i be better of to just move into the sydney investment home myself? i am interest in what would happen with the loan and tax wise,regaards Pete.
Hi Pete,
If you want to balance out your cashflow, then renting it out and finding yourself a rental could help you do this. It will also expand your opportunities as you would also be able to find areas that are performing well that you yourself may not want to live in.
It also means you can pick and chose where you live yourself without getting into a long term purchase that you may regret.A risk here is if your property remains vacant for an extended period of time.
When it comes to taxation strategies it is always good to get some independent taxation advice to ensure you are not going to get burnt later on as well (things like the anti-avoidance provisions of the tax act).
Knowledge is Empowering
Lincoln Haugh
Empower Wealth
03 9326 8900
[email protected]
http://www.empowerwealth.com.au
Please note this does not constitute property or financial advice.Melb is PPOR you can move out and rent it and not pay CGT for 6 years. You can also claim sydney as a tax deduction (but will pay CGT on Sydney).
If you move into the Sydney one that becomes your PPOR and you pay CGT on the Melbourne one.
Work out the finances to see the difference in weekly costs and CGT benefits. But if you are renting a cheaper place and gaining tax benefits on Sydney and not pasying CGT on Melb I'd say you will be ahead by renting the cheaper place and renting both properties out.
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