G'day again…
second post for today but this is for a mate….I have a mate who wants to buy a PPOR and use the FHOG but also rent two rooms out to his mates. Can he still claim this property as an investment property for tax purposes? I've recommended he go through a real estate agent even though they are his mates in order to get all the legal paper work correct. Can he claim a percentage of his rent and then write off a percentage of the interest on his mortgage to take advantage of neegative gearing? any help would be much appreciated…cheers..
tuggerwaughI dont beleive you can -ve gear your PPOR or part thereof……but I am not a tax expert …..its just my common sense alarm going off. He may actually be better of just quietly doing this with his mates and getting some mortgage help without getting to clever/greedy…..you attract the ATO's interest at you own peril
Hi there,
This is definitely one for the accountant!! My understanding of the FHOG was that it and investment properties were mutually exclusive. I have no idea if the rules change if part of the property is rented while he is in residence, although that sounds like a 'cake and eat it too' scenario which I think the ATO would frown heavily upon.
Keep us posted with what you find out from an accountant,
Julz
i believe that as long as it is your ppor you dont pay tax on money made renting rooms out . a friend of mine travels extensively and to remain exempt he has to return every 6 years to his ppor "in Australia" therefore subsidising his travels.BUT i would check with the ATO in case this has changed.
Hi
You can can negative gear your own home, but beware.
You may be able to save a few hundred or even thousand in the early years, but this could expose your home to CGT which could cost you much more in the long run.
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
Could you buy a house by yourself and then get your partner to pay rent to you and you can then claim the FHOG and negative gearing. Then later they can stop renting and it wont be a IP for CGT purposes???
Cheers,
Chris.
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