Hi Guys,
New poster but ive been lurking for awhile.
Proposal 1 ) –
I buy a house (330k) and live in it for 6 months with the aim of securing the first home owners grant of 14k and moving on to rent closer to work. While i live in this place i will build a granny flat for 50k to increase yield.Proposal 2 ) –
I continue renting where i am, buy the house (330k) build the granny flat ( 50k ) and rent it out from the start. Forgoing the 14k grant.My question is, if i followed proposal 1 can i still claim the cost of building the granny flat as a tax expense ?
If i cant. Whats better. proposal 1 or 2 ?Im a newbie with tax… Its so evil. i try to stay away from it.
Thanks in advance.
Marshes,
Prop 1 is obviously better. It is not just the free $14K you are getting but remember you also get stamp duty relief of about $10K for your own home. So we are talking $24K free money really.
Prop 2 will reduce your tax for sure but this is also available to you after you move out of your PPOR and make 2 x IPs out of it in 6 months time. 6 months of earlier tax relief will not come close to the $24K free money you get out of Prop 1.
All the best
Thanks, I was under the impression you got stamp duty concession wether it was a IP or not. It was just the grant you forgo if it was a IP.
That changes everything.
Thank you.
Now you're making me doubt myself.
Why don't you give a quick call to the OSR in your state to make sure. (Office State Revenue – these guys administer stamp duty collections)
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