Forum Replies Created
Thank you Everybody,
Don and Steevg, I take your point about it is the future that matters, not so much the past. I am very much trying NOT to be a buy, hope and pray investor and was trying to do the right thing and research lots of different areas to try and narrow down the area’s that met my overall strategy. I think I got bogged down in the figures and got very confused and frustrated on the day.
I have decided to stick with basically one data provider. Even if the data is not perfect, it will hopefully allow me to look at the historical trends and allow comparison with other suburbs and then further research the future prospects of those areas. I am also a bit the reverse and reading and listening to predictions for future growth areas and then researching them for historical comparison.
So thanks for the big picture face slap, I needed it.
Thank You one and all for your comments. The fence is still in good condition really so I have decided to straighten it. Thanks Freckle for the idea of painting/staining it. Hadn't thought of that one and your right, quick, easy and cheap to make it look a lot better. The shed is a tough one. I could definitely set it up with driveway access via the current side double gate and intended to make it car size anyway but I hadn't planned on adding the driveway etc to make it an actual property improvement feature. It would add an extra dimension and functionality to the property but I will need to do it carefully budget wise.
Thank You one and all, Particular thanks to JacM for providing the ATO link.
I had a big read through the Tax Ruling and can report the following. It comes down to 2 major concepts
- Repair vs Improvement and,
- a Single Acquirable Asset
Paragraph 30 gets to the heart of it
"30. Subparagraph 67A(1)(a)(i) provides that borrowings under an LRBA cannot be used to fund improvements. However, money from other sources can be used to improve (or repair or maintain) a single acquirable asset. For example, accumulated funds held by the SMSF may be used to fund the improvements.23 However, any improvements must not result in the acquirable asset becoming a different asset.24"
Thankfully the ruling is quite generous regarding the improvements that can be done to a house including adding bedrooms, adding a pool, outdoor entertainment area, garage,granny flat, etc as it is considered to NOT change the character of an asset as a whole (ie- residential house and land) – PROVIDED YOU DON'T BORROW THE FUNDS FOR THE IMPROVEMENT.
Effectively, if you have sufficient cash funds available within the fund, you can certainly renovate (improve) the property but would need to take great care in exactly what renovations you undertake. Forget all about subdividing, developing, changing the house into flats or into a restaurant etc as this definitely changes the character of the asset and is not allowed.
Before plunging in with the above info, there are 31 pages of Ruling and I have basically picked the guts out of it for my purposes so before you start you own renovations – have a very thorough read of it yourself – that was my very non-legal disclaimer! There is actually some good info there if you persist.
Again, thanks for every ones input and would still like to hear anybody else's experiences, interpretation or ideas.
