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Im not sure how you depreciate on a 60 year old house. My understanding was that you can depreciate it at (usually)2.5% p.a. so it will depreciate it off over 40 years.
Unless you are just talking about the costs of a re fitout of the house or something.GerryG wrote:Hey there Howie. Lets not get too hasty about selling up. Interest only loan indicates that you have set up things for tax reasons. Have you had the property you bought assessed by an investment property depreciation specialist. I am not talking about negative gearing etc, but depreciation specialist. Let me know, regards GerryHi Gerry,
The house is about 20 years old so not really worth depreciating.
I work for the dept of health here which has special salary packaging benefits for employees so i can salary package the entire amount of investment loan interest (rather than negative gear) so if investment loan interest is 20K for the year i basically get 20k tax free from my income, its a handy perk:) (but still leaves me paying out about $150-175 a week after costs)The idea was to pay interest only loan, rent would eventually go up to equal the interest payments (with the tax deductions) and the money would be made on the capital growth..assuming the average of around 8% capital growth was occuring, but im estimating it will be 8% capital growth total for about a 5-6 year period.
So yeah i can hold for long term, but are the losses that are being incurred now worth me doing so is the problem.
Thanks for the replies too.What is a rent to buy option?.
I know its long term but at 3% rise for the next 3 years it means i will have a house worth around$340k 5 years after i bought it up with loan for it of 322k, 15k for a real estate to sell it and i will have put 40-50k into it buy then.Very hard in W.A. now, i live in Bunbury (highest popluation %growth city in Australia at the moment) 3 years ago houses were around 180-250K, rent $200, now houses are are around 380-500K with rent at hardly anymore around $225.
What i probably should have mentioned is this.
We can salary package up to $8755 threshold with a certain number of things such as credit card payments, rent, mortgage and other ‘easy’ things. Then from $8755 to 100% of your income there is another different set of items that can be slaraypacked for this amount, they are more obscure items and harder to claim, but investment loan interest is one of them. So i salary packge my credit card payments up to the $8755 amount, then the only other thing i can really package for the rest ($8755 to 100% of my income) is investment loan interest.
We purchased it as Joint TennantsAny comments?
Thanks
I forgot to add, that because i work for the health department of WA i can salary package 100% of my income with investment loan interest. How would this work with holding a joint property with my girlfriend? So would we split the investment loan interest so if it was $20,000 i would get $10,000 i could salary package, and if so how would that affect her ability to negative gear her component of the interest?
