Hi all,
I’m a newbie to the forum and to property investing and seek your help.
For the last 6 months or so I have read a pile of investing books and have found them quite addictive! I think I’ve read all of Robert Kiyosaki’s Rich Dad series and am now going through Steve’s books with great interest.My partner and I are looking into our next step of action property wise, before consulting professional help, thought I’d ask a few questions here first. More of a tax question, however I figure some of you may have been in this situation before and may have some advice.
We currently live in our first bought property a 2 bed unit, close to the beach on the gold coast, we have just about fully renovated it, it’s in a great location close to shops and schools and is in a block of 6 with reasonably low body corp. We plan to start a family soon and would love to move on to a house with a yard and a bit of space.
However we would like to keep our unit as an investment, apart from the affordability, is this the right thing to do tax wise, I’ve heard here and there in books and at seminars it’s not ideal. but don’t quite understand how it works.
Any help in this matter would be greatly appreciated.
Regards,
KeenYou might consider the following option:
Refinance the unit to be an investment property loan, and rent it out.
If you are really precious about it, sure, buy another house for yourselves to live in. Put as much cash in as you can, keeping the debt on the IP high. However, it could work out cheaper for your second property to be another IP, an in fact for the pair of you to rent something for yourselves to live in. That way, you'd have two IPs, both of which have expenses that are tax deductable. (If you live in one of your properties, the expenses for that property are not deductible.)
Anyway, it's an idea for you to consider and research…
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
you need to decide which property you want to have the main dwelling capital gains tax exemption. As you can have the original property as your main dwelling for 6 years after you stop living in it. But you can't do it to two or more properties at once.
If you move out and do not keep the CGT exemption on it you need to get a valuation done to make it easier to work out CGT at a later date if you sell it as you have a record of the value of the property for the cost base for CGT when it changed to an investment property.
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