Hi all,
If I buy a block of residiential land with a shed on it, can I rent the shed space and claim the negative gearing breaks against the interest on the loan?
Example, I borrow to buy the land and my repayments are say $250 a week, then I rent the shed out for storage at $50 a week. Does this mean over a year I "add" $2600 ($50 x 52) to my gross income, then "deduct" $13000 ($250 x 52) as my expenses? (I hope that makes sense)Thanks
TimMakes complete sense to me,
As you have an assessable income to declare, you may offset this with your costs (interest is an allowable deduction).
yeah it made sense to me but I've learnt that if something makes sense, the ATO probably has a different opinion!
Does anyone know how buying land and renting it out for a year or 2, then building my primary residence and living in it will be calculated when it comes time to sell and CGT?Ask for a private ruling if you are concerned. I was audited last year, if you are keeping things real, you will have no problems……
Yes, the cost base will be taken from the date available for rent. Subtract the cost base from the value of the property when you took it off the market, and you will pay CGT on 50% of this figure (less anything that may increase the cost base- capital purchases, interest if you have not already claimed as an expense etc).
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