Forum Replies Created
I didn't explain myself fully. I don't think you can't add holding costs to your cost base for a PPOR.
If you had a holiday home which was never subject to the main residence exemption, you could add all the holding costs to the cost base, because the gain is subject to CGT.
In Stage's case, some of the gain is not assessable due to the main residence exemption. I don't think the cost base can INCREASE while it was being used as a main residence.
eg. Say you bought a unit 10 years ago for $150,000. You rent it out for 6 years, then live in it for four, then sell it for $250,000. Your capital gain is ($250,000 – $150,000) x 6/10, less 50% discount. The interest and rates paid during the last 4 years don't increase the cost base, as there is no tax payable on the last four years capital gain.
If you can show me something different, then please do.
The legislation says you must be running a business.
No, moving back in will not help you. Because it was rented out from the beginning, the 6 year rule does not apply in the first instance. For the next period of rental, the first six years of rental can be claimed as your PPOR PROVIDED you did not have another main residence.
Also, Kevin, you can't claim interest and rates and other holding costs for the time the property was a PPOR.
Rental losses have been added back for years, and it's only salary sacrificed superannuation that is added back, not the 9%.
Just to answer your Capital Gains question, the answer is yes, you would still pay CGT even though you aren't working. But the good news is, you pay CGT at your normal marginal rate, so your marginal rate will be lower than if you had other income.
For cars, you must be operating a small business (turnover <$2m) and use the car in your business, and not be claiming your Motor Vehicle Expenses under the cents per km method. Also, it has to be a NEW car, not second hand.
If you bought a $30,000 car, you would get a TAX DEDUCTION of $15,000, resulting in a tax refund of $6975 at the highest marginal rate, or $4500 at 30% company rate.
Then you can claim depreciation on the car at the business use percentage, as per normal. You can claim 100% of the 50% incentive regardless of your busines use.
It's a huge incentive, I had to read it a few times before it sunk in.
Calm down Garry. We see plenty of glowing first posts here so it's no wonder we get a bit bored and see through these type of posts.
Pardon my cynicism Gaz, but you have provided a spirited defence of Lifecorp for someone who is not a plant.
Have a look at this.
Also, Aussie Rob seems to be doing ok for himself, he just bought Jim Raptis' old headquarters on the Gold Coast.
I'm sure there are people out there who have done Aussie Robs course and it worked for them, but you need to really do your research and own due diligence before spending the type of money Aussie Rob wants you to spend. Has he made his money from trading himself, or charging other people for training?
bazmania wrote:Scenario
Currently live in own home with P&I mortgage. (309k remaining)
About to buy additional property (circa 750k) with IO mortgage.
Intention is to rent out new additional property for a couple of years, then move in and rent out my current home as an investment property.
What is the most effective way to ‘engineer’ this in order to minimise Tax payments. I am familiar with only being allowed a PPoR at any single time and also the 6-year CGT Rule.
Technically could I ‘move’ into my new property for a month, ‘move’ out and back into my existing property and then rent out the new property and still have CGT Tax exemption up to 6 years in the new property?
Whether you have moved out is a question of fact, and would be based on changing your address for various items (drivers license etc), having the utilities connected in your name. It would be hard to do this for a month, and probably wouldn't pass if the ATO found out.
How long are you planning on staying in the new house? If you're planning to stay for a long time, the taxable gain may be minimal anyway. You would get the house valued just before you moved in.
bazmania wrote:Prior to moving into my new property in a couple of years, can I remortgage existing property (increase loan to increase interest payment), and transfer lump to new premises?No, as the deductibility rule for interest is, 'what were the borrowed funds used for?' As the funds would be used to pay down non-deductible debt, the extra borrowing would not be deductible.
Super will be less attractive after Tuesday.
The rumours are that the tax deductible contributions for all will be halved, making it $25,000 for those under 50, and $50,000 for the over 50's, to 2012. Some changes also may be made to the Transition to Retirement arrangements.
I know of a guy who, as he is still working part time and over 65, can make a tax deductible contribution to Superannuation one day, then withdraw it TAX FREE the next. I hope the govt change this loophole.
And movemysuper, your link doesn't work.
If the property is held in the wife's name (ie the wife owns the property) then the capital gain is in her name as well. It makes no difference how the loan was set up.
CGT tax is paid at the marginal tax rates, and if held for longer than 12 months, there would normally be a 50% discount on the capital gain.
This article basically tells us nothing. From a statistical point of view, its and extremely small sample size. The fact is, as reported in the Age last week, house prices fell 3% last year in Melbourne, and is up about 1.6% for the first quarter in 2009.
mattnz wrote:Thanks Scott,Hmmm, so let's say for example I sign a contract with a builder for $300k and a few weeks later I get a deposit of $20k from the eventual owner, for $20k more than I am paying for the property, but it won't settle for another couple of years. Does that mean I have to pay the gst on the $20k I have received in cash, or on the full $320k?
Surely you only pay gst when the money is received, not on the contract signing for the full amount?
You can be registered for GST on either a cash basis, or an accruals basis. Accruals means you are liable for GST when the contract is signed, Cash method is obviously when you receive the cash.
Deposits are an interesting one, because the GST is payable on the supply of goods or services. When a deposit is paid, has there been a supply of goods and services by the supplier? The Reliance Carpets case has looked at this, and I think is currently under appeal.
Hi Blogs,
I'm not sure about the run on the AUD, just because other countries and currencies are travelling worse than we are, and inflation being the least of our problems, but I understand the logic behind your thoughts.
I think there are competing factors, such as rising unemployment, low consumer confidence, recession on the negative side, and low interest rates, government intervention, still reasonably strong demand for housing on the positive side. Inflation is heading downwards, despite huge reductions in interest rates in the last 8 months and stimulus payments.
It will be interesting to see what happens, that's for sure.
blogs wrote:Dan-tell me, what effect do you think another $40 BILLION floating around the economy will have on inflation? The effects of this and the recession are still to hit…give it time, you will see….Then add in increased taxes (well the government does have to pay for this massive loans somehow..) and a increase in interest rates (to stop a run on the AUD) and we will have a pretty bad situation me thinks……
I'm no expert, I just can't see it being as bad as everyone thinks. Last year, Steve Keen and his disciples were predicting a crash on Australian property. Median prices went down 3% on average last year in capital cities, and have risen in 1st qtr of 2009.
By the $40b I assume you mean the borrowings and stimulus payments. Well, people aren't spending it. GDP contracted 4th qtr 08 and will surely contract for 1st qtr 09 as well. Inflation has gone from 4.5% to 2.5% in a short time.
Why would there be a run on the AUD? Interest rates in the US, UK, Japan and most of Europe are lower then Australia. Those countries are also in a much worse position than Australia. GDP in the US has contracted by 6.1%, according to today's AFR.
Would I buy property now? Probably not, I'd want to see the effect of the reduction in the FHOG, and what happens on Budget night. I'm not one of these "property doubles every 7 years" guys, but I can't see a 20% reduction either. I guess I'm stuck in the middle somewhere.
Of course interest rates aren't going to stay at these lows forever, but I can't see them rising in the near term, because of increasing unemployment and lower consumer confidence. Inflation has been decreasing steadily and is now in "the RBA band".
Maybe I'm getting cynical in my old age, but everytime I hear an economist talking about house prices, they seem to say that prices will drop once X happens, be it FHOG reducing, or whatever else. They seem to be pushing their predictions further and further out. Also, if you are the most pessimistic economist, you get the most TV and press time.
And I notice that Steve Keen seems to hav revised his predictions from a 40% drop to a 20% drop.
I can't see a 'bursting of the property bubble'. Demand is still reasonably high, interest rates are low and if things do get bad, there will be some sort of governemnt intervention to help people somehow. A property crash would be unpalatable for any government.
There will be some CGT payable on the house, for the portion it was used as an investment property. Before you rent it out, you should get a valuation.
Lavender Lily wrote:As for how much do they charge, why not contact their office to find out?Well, you said they "don't charge an arm and a leg", so I was hoping you could share with the community how much they did in fact charge you.
Either you know how much they charge and won't tell the forum, or you don't know, and your previous post was untrue. Which one is it?
Lavender Lily wrote:They don't charge an arm and a leg and one of your children, to go along to their meetings. They hold your hand every step of the way. So very important. You don't feel like you are being ripped off. They make investing fun and exciting for all age groups. No one is to old.How much do they charge?
Lavender Lily wrote:Hi, I have bought 2 properties through the Discount Property Group and am now on to my third. I have found that Dave and his team are always there to help you. They are an amazing bunch of people who have helped make my property investing quite an adventure. The Follow Me Chat Club was the beginning of my investing adventure and came along at a time when I really needed something in my life. I can only praise and say thank you for setting the path for my financial freedom.I never tire of these "Joined today, everything about X Group is fantastic" posts.
But in all seriousness, it's great to hear they are an 'amazing group of people' and they are 'always there to help you'. Did this post come straight from the advertising brochure??
