Hi, we are considering buying a property where we can live in the house at the front, but subdivide the back and sell it off/build units & sell them.
We have cash to buy the property but are wondering how things work for the ‘investment’ part of the project ie if we plan to sell off half the land, should we get a mortgage for half the total cost so we can claim the interest as a tax deduction? or can we not do that. It seems that if we pay for the lot out of our own $, we miss out on some tax advantages for the investment part of the property.
Can anyone clarify this for me? Thanks.
Narelle
Narelle,
You need to get some professional advice.
There may be the option of calling the whole thing your home with no tax deductions, but then exercising the CGT exemption on sale of theland. This may be the most useful.
If you build then I am not sure how it might work.
Please speak to a savvy accountant.
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985NODOC Loan – 65% Loan – No questions asked! 6.85% Rate!!
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
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