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Thanks for the reference,
I will read it.
I know many people from Sydney do buy houses in Withsundays for instance. And many real estates do advertise investment properties where they say you are eligible for x amount of weeks as holiday portion. I also know Sydney people who have house there and spend 6months there and 6 months in Sydney. Or similar.
Until now I did not have this dilema because all properties are for full rent and are rented…and my PROP is my PROP since day one – clear cut.
Terryw,
The PROP is clear as mud and the 6 year period as well.
I do pick up on your word "may". Which means this is a grey area and someone is the decision maker? Look. Lets take a specific example. Many people buy investment property say in Withsundays. Say you spend $1mil AUD bying such a property there while you live in Brisbane.
With property like this there is a probability that:
a.) You will not get tenant 12 months but say 6 months or 2 weeks or ???
b.) You do want to go there and spend say 6 months per year or say 2 weeks a year holidays there.Who decides if your "may" applies and you get 100% of bank interest deduction and 2.5% at full rate. Accountant?
1. No. Costs can only be deducted to the extent that the relate to generating an income.
Some costs could be claimed against capital gains when sold though.Teerw. Are you saying that when you see your accountant in June after full year of having investment property that rented out only for 6 months out of 12 and you pay 7% bank interest than only 50% of the bank interest cost would be aligible for the tax deduction? In other words the deduction % is directly proportional to property occupancy %?
And the same would apply on 2.5% construction cost tax depreciation? 50% if 6 months rented?
2. Only one could be counted as the main residence at any one period.
Well, if above and 1.) is the way as described than you realy can live physicaly anywhere you like while first property is your main residence all the time. If you live in your "investment" property 12 months a year than you would simply end up paying 100% costs without any immediate benefits until such time you either rent it out moving back or when you sell.
Here is an idea from US economical collapse.
If this chateau costed $44mil AUD to build and was sold for $10mil I would happily pay $1mil AUD to share luxury appartment of similar style (in same building and great facilities) with others in such a building. The question than would be if it is possible to fit 44 luxury penthouse appartments in building like this. Or maybe $2milion and 22 portions. Or 88 portions for $550k each?
On the other hand I wonder if there are any building companies in OZ that would in actual fact know how to build such a building
or they would have to invite overseas expertise… Thank you all for so far submitted comments. If any common ground can be stated I think most people would agree that there is a general public frustration with quality of housing people are forced (economicaly) to buy but at the same time it is hard to break out.
However the good news is that there are Aston Martins, Audi's and they are sold and are desired. Making and creating Aston Martin or Audi in property and trying to sell it to a group that can only look at it would break the bank. Selling it to people who can buy property of Audi quality of at least Subaru is part of the answer.
Increasing quality and trying to sell it the same group of people is unfortunately dramnaticaly hard. Inovation is one way…possibly in finance world because what people do not realise is that by buying properties they can "afford" the final figure they pay is large. If there is invention in how finance is provided to people than higher quality would be accesible to same group of people.
For instance I have seen Wolksvagen Tiguan being now sold to public at 2.8% interest by SKOADA finance group. . . It must be an outside box thinking solution as there is none within conventional range of thinking…
Hi,
Property market is flat these days and in some areas it is still going a bit down.
$20k (+$10k government + $7k first buyer) can be burned away and the only party benefiting from this deal would be your bank.In current flat market the benchmark is 6% term deposit interest income. If you can not beat this safely with acceptable risk than keep your money and any savings in term deposit earning 6% till such time where you will find a clear opportunity that is going to beat 6% (with safe level of risk attached to it).
As to the syndicate it does not matter. Even if you join syndicate that has collected $1million the syndicate still needs to beat the 6% performance no matter what. There are many tigers there in the market who want people's cash and when you look their performance is pathetic and very often negative and far below 6%.Because the market is flat at the moment exluding special deals (risk attached) super, sharemarket and property is not recommended unless you find special opportunities like for example you buy house that makes money instantly.
It is however great time to educate yourself not only in property but also in sharemarket so when good times come you are ready. For instance trading options by writing options (recieving money) on stocks you would like to own long term anyway and that way you buy lower and you recieve money even if you do not buy… etc.
You can go to our website (still under construction as are not in hurry either) and download property investment calculator by clicking on left photo. This calculator takes into account deductions on construction, plant, tax deductions and also you can simulate market and rent. Or even see what happens if you install solar panels… It may take you some time to understand the calculator (by following cell formulas) but this exercise will benefit you. More importantly there is GO and NO GO function and you will see that by borrowing money and buying property in current market it is far better to have money in term deposit earning 6%.
I hope the calculator will be of some benefit.
If you paying rent is it possible to earn and live somehwere and not to pay rent (saving money for upcoming investment) or consider a drastic shift on career to increase money in for the same reason.
