A friend of mine has recently bought a townhouse in Brisbane and has just been posted up to Townsville. They have asked my opinion on the benefits/consequences of renting their place here and renting up there. They are unsure of time lines at this stage and I have mentioed the 6 years that the current PPOR will remain CGT free but I was wondering about the cashflow/tax benefit of doing this.
My thoughts are that assuming they rent their place for $X and rent up in Townsville for $X, give or take, their cashflow will be the same. I am also thinking that since they are renting out their PPOR they will also be receiveing tax benefits by being able to claim expenses on the PPOR (negatively geared) and therefore they will be in a better position.
Any thoughts, am I missing any catches?
Thanks
RhysHi
Thats the way I see it too. Even if they are paying the same, they will ahve all of the extra tax decutions to claim, making them better off.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Don’t forget that their rates and body corp are deductable too.
And also any repairs that need doing might fall under that catagory too!
cheers
v
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