Land tax will depend on where the properties are located, how long the lease is and your situation.

I don’t think any insurance covers this sort of thing, but I could be wrong.

Excel

appg2 wrote:

Will the interest tax deductible on the full loan amount or should I offset my loan by 70K that was paid off in previous loan before calculating interest for tax deduction.

You would have created a mess if you have ever redrawn from the loan. If you have never made a withdrawal then the lowest balance would be the deductible portion of the loan.

I have just told one member of this forum that i have to charge him $500 to discuss anything further. Going back through my emails I see the first time he contacted me was in 2007. I recalled various long phone calls numerous hours explaining loan structures, deductibility of interest etc. He would go away and the resurface approximately every 12 months. About last year he rang me for another 1 hour conversation and then he sends me a loan structure email on the letterhead of another broker, meaning he had been shopping around. He contacted me again and I said I have to charge you $500. He asked me if I was serious! Then he went away, recently coming back again last week saying XX (a broker) was in Europe and he needed a question answered urgently – by this time he had changed banks. This time I politely told him to not contact me again. He still doesn’t understand that I made absolutely no money from him and wasted hours and hours of time talking and emailing him.

And the thing is it seems he still doesn’t understand how to structure a loan and has set things up badly.

Get some tax advice as this is confusing.

You will need to draw a time line and consider the overlappinng ownership periods.

You should also look at the legislation:
s118-145 the absence from main residence rule
http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.145.html

s118-150 = 4 year rule on construction
http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.150.html

Look at the wording of ss3
(3) You can make the choice only if:

(a) a * dwelling on the land that you construct, repair or renovate becomes your main residence (except because of section 118-147) as soon as practicable after the work is finished; and

(b) it continues to be your main residence for at least 3 months.

and ss (5)
(5) If there was already a * dwelling on the land when you * acquired your * ownership interest and you or someone else occupied it after that time, the period in subsection (2) and paragraph (4)(b) starts when the dwelling ceased to be occupied.

tom123 wrote:

you can rent a PPOR out for up to 6 years before it is considered a IP?

and i’m pretty sure you don’t have to live in it when you first buy it to be a PPOR. as in it can be rented out at the start.

thoughts terry?

It can’t be a main residence until after you have lived in it. So it you don’t live in it first it will always be subject to CGT on a proportionate basis. If you later move in and establish it as the main residence and then move out it could be still classsed as the main residence (provided the other requirements met) from that point on for up to 6 years.

tom123 wrote:

Thanks Terry, insurance as in landlord insurance?

All insurances.

When selling any expense you have not otherwise claimed could be used to reduce the cost base for cGT purposes.