The 6 Year Rule states that you can rent out your PPOR for about 6 years and don't accrue any capital gains tax as long as you move back in (or sell it) within the 6 year period. And provided you don't claim any other property as your PPOR within that time (for instance if you are overseas, or are renting somewhere else).
The question I have is "If my PPOR is relatively new, can I also claim depreciation during the time it is rented without impacting the freedom from capital gains tax?"Pyramid
Yes, why not. You can claim all associated costs of maintaining a rental property – travel, loan costs etc too.
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
Its a good question. I'll have to do some checking.
When claiming depreciation and then selling, the issue is that the sale of the depreciated assets is treated differently to the sale of the CGT asset. Say you depreciate the oven and carpets. When the house is sold, the depreciation claimed on the oven and carpets is 'recouped', and not subject to the CGT discount.
As the sale would be CGT free, in your case, the question is whether the recouped depreciation is assessable, and what value to put on the depreciated assets?
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