G'day everybody wanting to ask if I purchase my 1st property what is the best structure on setting it up as PPOR or IP. I want to buy a property to invest in first than sell it within a few years to make a profit and than buy another property. Will I be looking to pay capital gains tax if I set up it up as an IP vs being exempt from capital gains tax if I set it up as a PPOR? If I am just aiming make capital gains better to set it up from the beginning as a PPOR because I don't intend to rent it out (at this thinking stage) and will live in the property myself than I will sell it after X amount of years? Thanks
Hi, you don't choose whether to set it up as an IP or a PPOR.
If you live in it, it is a PPOR, If you don't then it is likely to be an IP . But you can claim it as a PPOR for 6 years and not pay CGT If you live in it first then rent it out (and don't own another PPOR).
Why do you want to buy to sell then buy again? That's not a very good strategy. You lose buying (stamp duty etc) and lose again when you sell (selling costs etc). The idea is to build a portfolio.
Why not just keep it, withdraw the equity to buy again?
I'd suggest doing a lot more reading on property investing.
Hey Catalyst
Thanks for the reply, Oh I see I am very new to this and I better keep having a read and become more knowledgeable at this. I am reading other forums on here about setting up as IP and interest only loans with offsets and your remaining principle being tax deductible so I assumed there was ways to set up your properties IP or PPOR
Sorry I am very new to this and lack very basic knowledge.No, don't be sorry. Everyone started out not knowing anything (contrary to what some people on property forums tell you LOL). We all leant along the way. Asking questions and getting answers is better than not asking and risk making mistakes.
Over the years I have saved myself from making numerous mistakes just by reading property forums.
Keep reading and asking questions. You'll get there.
Yes getting an interest only loan with an offset is the best way to go. Just double check with your bank as some try to give you a loan with redraw. They will tell you it's the same. It is NOT when it comes to investing and redrawing the money.
Get a good property accountant too. That is invaluable.
The Property Puzzle by Stuart Wemyss is a good all round book. But there are many that are good. Go to your local library and borrow a few. Also borrowing a few investment magazines gives you a look at what other people are doing without paying out a fortune for subscriptions.
Happy investing.
Sorry I am very new to this and lack very basic knowledge.You must be logged in to reply to this topic. If you don't have an account, you can register here.
