Forum Replies Created
Hi Humpz,
Know this is a bit late, but hopefully you may find something out of it. There is much more to consider than could possibly ever be covered by this forum. Options could be :
1) Continue renting, save up bigger deposit & have larger amount to purchase property in Canberra.
2) Buy now & rent out when you move to Canberra and purchase new PPOR.
3) Buy now, sell when moving & purchase new PPOR in Canberra.
4) Continue Renting & purchase IP at Canberra.
Pros/Cons :
1) Pro = Bigger deposit & less Mortgage Insurance charged by bank. Rent money is not necessarily dead money if you use the excess cash wisely.
Will not have to pay costs to purchase where you are now, then again in Canberra (no tax advantages on PPOR purchases).
Con = House prices could go up & lending ratio (amount you borrow to value of property) could stay the same or worse.2) Pro = Own house sooner.
Keep excess cash in a Mortgage Offset account so you can use it to purchase new house in Canberra.Con = Paying gov & bank fees & charges now & again later on new purchase.
Will you have enough equity to cover both loans?
No tax advantage on PPOR.3) Pro = Will come down to your personal preference this one
Con = Fees, fees, fees. Buying fees, selling fees. If the property doesn't increase in value of what you purchase + what it cost you in fees, then you fall behind.
4) Pro = Tax deduction on fees/charges used to purchase property.
Con = Extra stamp duty & possibly other fees (unsure about Canberra).
Have to work out CGT when you sell (get valuation just prior to moving in & hold on record).
Seek accountant advice, or if you get access to financial planners (etc…) through ADF use them.Advice is general & information given should be confirmed by professional accountants/advisers. Just trying to give you a start to the questions that you may need to ask them.
Hi Trent,
Agree with above.
If you don't want to move in straight away, it would be an idea to obtain an indepentant valuation on property worth when you do move in. This will help when calculating CGT on sale in the future. You will also need to know you will pay more in Contract Stamp Duty if you purchase as an investment. However, stating this, any fees/charges should become tax deductable and be able to be added to cost of purchase (there-fore reducing CGT).
Be a good idea to run this via a registered accountant for confirmation.
In short :
1) Move in for 6 months, then move out for up to 6 years = less Stamp Duty (depending on state). No CGT if you have 12 months Owner Occupency (unsure if it has to be continuous).
2) Buy as investment property = more initial expense, however tax advantages (presume negative gearing). Also may help on bank servicing with rental income depending on your personal living position (i.e. already own a house, renting or living with family etc…)
See an accountant, worth the money spent.
