Hi All,
I am looking at buying some investment property. I also have a PPOR.
I am looking at moving to Canada for a few years and will rent out my PPOR whilst in Canada and continue to rent out my Investment Property.
How does this affect my tax situation? If I am negatively geared on the investment property and am not an Australian resident, can I just complete an Aussie tax return and get a refund due to the negative gearing (I won’t have any Aussie income at this stage)? Or would I claim the refund on my Canadian return?
I also understand that I can keep my PPOR for 6 years without needing to pay CGT if I sell. If I rent out my PPOR whilst in Canada and end up negatively geared, can I claim deductions on the interest of the mortgage?
Basically my question is will I be adversely affected by owning investment property and renting out my PPOR from a tax perspective if I move to Canada?
Thanks!
Kurt
You need to speak to a property savvy accountant ASAP.
You can claim all outgoings on both properties if rented out. And also declare the rent on both of course. You can rent out the PPOR for 6 years without having to pay CGT. I’m not sure about your tax because you are not an Australian resident. That changes everything.
I doubt you’d be adversely affected. It sounds like a great opportunity and if someone is paying your bills even better.
There are a lot of factors to take into account in your situation. You must ensure you get it right.
good luck. Living in Canada sounds like a great opportunity.-
This reply was modified 10 years ago by
Catalyst.
Many issues – which all boil down to whether you will cease to be an Australian residence for tax purposes – you may not from what you have written. if this is the case you will be assessed on your Canadian income in Canada and in Australia and any income losses can be used to offset the tax payable.
If you are a non resident then you won’t pay tax in Australia on your Canadian income. If you won’t have an income in Australia (other than rent) then you won’t be paying tax and cannot get a refund of tax you haven’t paid. You will also lose the 50% CGT exemption.
Also asbsence from main residence rules – you could claim the CGT exemption here for up to 6 years of absence from the former PPOR. Residences you own overseas count too so factor this in. e.g. if you buy in Cananda
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
Hi guys,
Thank you very much for your responses. Looks like I am going to need some professional advice.
Where does the line get drawn about whether I go to an accountant or a lawyer?
Cheers
Kurtuk,
You questions and situation is all about tax. So get a property savvy tax accountant as mentioned above by Catalyst. A lawyer is needed if you require legal advices.
Let me tell you a secret… Terryw who just replied to you is a property investor, a tax accountant, a lawyer, and a finance person. I’ll definitely give him a call.
Cheers!
PHP | Mortgage Station Pty Ltd
http://www.mortgagestation.com.au
Email Me | Phone MeGive us a call or send us an email for a free residex report.
Hi guys,
Where does the line get drawn about whether I go to an accountant or a lawyer?
Cheers
You need advice on tax law. But a registered tax agent can advise on tax law just as a tax lawyer can. A tax agent (often an accountant) would be cheaper generally!
Thanks for the plug PHP, but I am not actually an accountant. I am a director of a registered tax agent company and also a lawyer (and director of a separate incorporated legal practice). Accounting is a separate profession and not all accountants are tax agents and not all tax agents are accountants. Only a tax agent can submitt a tax return for another person and only solcitors or tax agents can give tax advice (maybe financial planners can give tax advice in limited circumstances)
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
Woops! Sorry Terry.
Kurtuk,
Apologies for the incorrect info there. All I’m trying to say is that Terry is awesome! :D
Cheers!
PHP | Mortgage Station Pty Ltd
http://www.mortgagestation.com.au
Email Me | Phone MeGive us a call or send us an email for a free residex report.
Thank you all for your great help!
Terry – you have helped me in the past on the forums, and will definately give you a buzz if I need a lawyer!
Cheers
Hi Kurtuk,
Just let us know how you go. If you have anymore questions don’t hesitate to come back here. Thanks!
PHP | Mortgage Station Pty Ltd
http://www.mortgagestation.com.au
Email Me | Phone MeGive us a call or send us an email for a free residex report.
-
This reply was modified 10 years ago by
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