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  • Profile photo of crossbackcrossback
    Participant
    @crossback
    Join Date: 2007
    Post Count: 1
    October 23, 2007 - 8:07 am
    Terryw wrote:
    Under s118-145 of the Income Tax Assessments Act you can still class this property as your main residence for up to 6 years while it is being rented out. And you can claim all costs associated with it as per normal investment property (rates, interest etc). Then if you sell this within 6 years, provided you have no other main residence, it can be CGT free.

    After renting it out for a while the value will hopefully increase and then you can use the equity build up to leverage into the next ones.

    Hi Terry,
    I'm a bit confused.  I once read from a Noel Whittaker column that if a loan was taken out to financed a PPoR then in the event  that that same property is rented out – you CANT actually claim any deductions, or you CANT claim it as an investment.  The ATO supposedly looks at the original intention  why the loan was taken out… if it was intented to be a PPoR even if it was rented out later, the rates, interestes will not be deductible. 

    I migh have misunderstood the article. I hope you can clariffy on this.

    thanks

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