Hi Guys,
Im thinking about getting in to the property market i have been looking at buying a unit for around 180-190k i have 20k deposit saved,
My question is this can i use it as a investment property having it negative geared to gain the tax benefits then after 1-2 years then live in the unit?, would there be any tax implications or fees or charges i would have to pay?
Thanks in advance
Regards
TrentHi Trent,
You would have to pay Capital Gains tax when you sell, for the percentage of time the unit was used as an investment. There would be no CGT payable if it was solely your residence.
One way to avoid CGT would be to move into your unit, move out 6 months later and rent it out for up to 6 years, then move back in. No CGT would be payable in this scenario.
Hi Trent,
Agree with above.
If you don't want to move in straight away, it would be an idea to obtain an indepentant valuation on property worth when you do move in. This will help when calculating CGT on sale in the future. You will also need to know you will pay more in Contract Stamp Duty if you purchase as an investment. However, stating this, any fees/charges should become tax deductable and be able to be added to cost of purchase (there-fore reducing CGT).
Be a good idea to run this via a registered accountant for confirmation.
In short :
1) Move in for 6 months, then move out for up to 6 years = less Stamp Duty (depending on state). No CGT if you have 12 months Owner Occupency (unsure if it has to be continuous).
2) Buy as investment property = more initial expense, however tax advantages (presume negative gearing). Also may help on bank servicing with rental income depending on your personal living position (i.e. already own a house, renting or living with family etc…)
See an accountant, worth the money spent.
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