From a tax perspective, definitely better to rent out a separate place for you and your partner to take advantage of all the tax benefits of having investment properties, especially if you are applying negative gearing.

Plus when you rent your own – you may also be eligible to deduct occupancy expenses depending on what kind of work you and your partner are in.

Fletcher Tax Accountants
http://www.fletchertaxaccountants.com.au

If you received property or shares – that would be a different story.

But with cash – there shouldn' t be any tax consequence as your parents would have settled any CGT tax within their individual tax returns. You cannot be taxed on the proceeds twice. Tried to find a back up on the ATO site – but can't find one either.

Fletcher Tax Accountants
http://www.fletchertaxaccountants.com.au

Hello again

The 3 valuations (and average of) can be used as the adjusted cost base upon the eventual sale. It is called "Market Value Substitution Rules"

Linda
Fletcher Tax Accountants
http://www.fletchertaxaccountants.com.au

Tugger

Some food for thought:

As per Richard's suggestion – I too would suggest to get a deduction or claim for any expenses/purchases done to your IP whilst its still your IP. Even if it is for 2/3 years.  (… Better than NIL once its your PPOR)

Also I strongly suggest getting a market evaluation by 3 local agents in writing of your IP when your IP becomes your PPOR – becomes so much simpler for taxation purposes down the track when and if you sell it.

In regard to CGT – dates and market values are very important. You need to clearly note for yourself and on your tax returns when your property becomes your PPOR and/or stops being an IP. When you sell your IP which will become your PPOR – an apportionment will need to be made between the investment and main residence side of things. Hence paperwork is crucial!

Linda
Fletcher Tax Accountants
http://www.fletchertaxaccountants.com.au

Hi Molleye6, To answer your queries – market value is worked out using available data in the current market place. Usually the most efficient way is to take the average of 3/4 written rental appraisals from local agents. The ATO clearly states that should non commercial values be charged – an apportionment of expenses will also need to be made. It doesnt matter if you use an agent or don't take up insurance or garden maintenance expenses. Main factor revolves around income/rent charged. If you knowingly receive below market/commercial rates – you will need to apply the same proportion down towards your expenses. If you'd like more help with this subject please feel free to email us for more clarification – [email protected]