Hi All !
My wife and I are new to this and have had our own share of ups and downs with investing so far . Curently we have 2 properties that we are paying off , the properties aprox value is 300k . The most recent property that was purchased cost us 132k and is currently valued at 174k . Because being a tradesman we have rennovated the kitchen ,added a second bedroom ( now 4 bed ) and added an ensuite bathroom . All plumbing has been upgraded as the house was built back in 1920 .Total for all reno’s will aprox cost 15k we were going to refiance the property on the market value ( which will be aprox 200k ) . In theroy 132 + 15 = 147 so 200 – 147 = 53 . We are under the impression that this 53k is tax free because we are not selling the property , we will have tennants renting this large property for aprox $250 per week , Should We Do This or just rent out the property .
Sincerely
Ian/SueInvestor,
The $53 000 is tax free if you take it from the loan. Problem is that if you take it for personal use you are really just going to create a non deductable $53 000 debt.
If you use it to buy another IP then it will be deductable and still tax free.
You will incur CGT should you sell the property to get to the $53 000.
Cheers,
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Must of been a really small room ( 3 x 3 ) and very, very cheap fixture for the kitchen and ensuite to do all that building work for around 15k. ?????
Investor is a tradesman – shows the difference trade prices and free labour makes[
]Simon Macks
Mortgage Hunter
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
I’m a Carpenter $ Joiner by trade and I’ve done a estimating course with the HIA. Just what experience have you in this field Mortage ?
Hardly any at all. The comment was tongue in cheek with a smiley to match [
]I defer to your expert opinion.
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
I’m no expert, but it so happens that just a few days ago I calculated the material cost for a 4.2 x 3.8 room on a concert slab with a tiled roof and it was near 10k, all materials were top quality and at retail.
Investor,The $53 000 is tax free if you take it from the loan. Problem is that if you take it for personal use you are really just going to create a non deductable $53 000 debt.
If you use it to buy another IP then it will be deductable and still tax free.
You will incur CGT should you sell the property to get to the $53 000.
Cheers,
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Thanks Simon for the tip it is worthwhile considering as I was unsure as to what to do Though I thank you for your input .
Yours Sincerely ,
Ian Jackson .[
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Must of been a really small room ( 3 x 3 ) and very, very cheap fixture for the kitchen and ensuite to do all that building work for around 15k. ?????
Actually the kitchen alone measures 6 x 5 the reason it has cost so cheap is because Being in the industry I am able to purchase materials very cheap and able to write them off to my business .Investor, I would be very careful writing building materials off to your business or even mentioning that this is what you are doing. Have you not heard of Tax Audits? My husband and I run a building company and I can assure you it is far wiser and safer to not cook the books as we can all expect a tax office visit one day. If you have a set up for your investment properties to legally deduct your materials purchases then that is fine.
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