All Topics / Legal & Accounting / Best tax outcome?
I bought my PPOR early this year and rented out half of it. As I've been saving hard and putting the $ to my offset account, I've managed to reduce my loan to half recently(with most of the $ sitting in the offset account). At the same time, the PPOR value would have grown by at least 10% based on nearby sales.
Therefore, the tax benefit of claiming half the cost of interest & depreciation on the property now seems less attractive compared to reducing how much CGT I might have to pay when I sell the PPOR in future.
I'm just wondering, what would be the best options for me?
Should I continue renting out half the PPOR but receive it as cash in hand and not bother about claiming tax benefits. In this case, I would only have to pay CGT for the period which I claimed tax.
Additionally, am I correct in assuming that any depreciation that I've claimed should be added back to the cost base of the property when I sell it?
Any advice is very much appreciated. Thanks.
I'm sure that you are not expecting anyone to recommend that you break the law
crj wrote:I'm sure that you are not expecting anyone to recommend that you break the lawOf course not., was half asleep writing it…
It doesn't really matter if I continue renting out or not (although I'm aware that I should declare any rent received to the ATO), as the rent received + tax claims are not looking too attractive now. I've managed to payoff my loan faster than expected, and would prefer to minise my potential CGT. Not sure if I'm missing anything?
saving a little bit in tax now could cost a fortune later in CGT.
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
You must be logged in to reply to this topic. If you don't have an account, you can register here.