To confirm

If the income is input taxed then you cannot claim GST on the expenses incurred in earning that income.

Residential rents are input taxed.

It may be possible that someone is running a business from a residential property, and not residing there. (Did that myself a few years back). In this case rent could include GST and all expenses…[Read more]

Kooringal

Something to note.

My understanding is that your PPOR does not have to be house you are living in.
You are only entitled to one PPOR, however.

Scenario

PPOR for many years, buy new PPOR and rent old one. Do a valuation of old PPOR just in case 6 months after new PPOR purchased.

You do not have to select which property is PPOR until…[Read more]

Kooringal

Was old PPOR purchased on or before 19 September 1985.

If so NO capital gains will apply. Whether you sell it now or later.

However if you transfer it to a trust it will start to attract CGT from the contract date of sale to the Trust.

Regards…

Laurie

Be very careful transferring PPOR or IP into Trust whose units are purchased by a SMSF. You could be breaching In-House Assets rules (ie more than 5% of total assets of SMSF purchased/leased from a related party), and be found non-complying. Also possibly breaching Sole Purpose Test of SMSF if you intend to pay rent to the trust whose units are…[Read more]

Hilary is correct.

A super fund cannot have a charge over any of its assets. However SMSF can pay cash for all or part of a property providing any other part owner pays cash. The other part owner may use equity in their own home eg to raise the cash.

Members of the SMSF cannot rent the IP. A SMSF must have a Sole Purpose of providing retirement…[Read more]

Quote:
Laurie, I agree with you on the $600 fee issue, but disagree with all your depreciation calculations.

Michael (Michael & Kaye)

What you have since come to realise is what I was trying to demonstrate.

When you purchase an IP, the depreciable items are effectively removed from the purchase price to establish a cost base, and the written…[Read more]

Interest only loans free up extra cash so that you can raise your deposit for the next IP more quickly.(Either in cash or increased equity in your own home).

How long are you planning on holding the IP

50 years age a good IP was $8,000 at interest only, today you could pay it off with your bankcard. In the meantime, the extra cash flow would…[Read more]

Carpet & Blinds, only $7000 less amount claimed as depreciation goes into cost base.

Also $1000 Bank Fees, $200*2 already claimed, balance of $600 into cost base.

Other depreciations $8700 ?

Say purchase price $450,000 and deprec items = $20000 (stove, HWS etc) then cost base = $430000.
On sale add $20000 less deprec claimed.

Laurie

Sebastian

One thing to consider if you are holding property for eventual resale, there is no 50% Capital Gains Tax Discount in a P/L company. (Even if there was, you can only get money out of a company as wages or dividends and you are taxed personally on both).

The 50% CGT Discount passes from both a partnership and a trust to you through a…[Read more]

andyj

If the unit is for residential accommodation, then it is input taxed, and you will not be able to claim back any GST associated with the purchase or future running costs. It would be ideal to keep it completely separate from any other GST registered business structure that you may have.

As far as valuation is concerned, a buyer will only…[Read more]