Hi I was living in a property that was unencumbered then my parents required care so we bought a place together and the property I was is was going to be sold to pay for new one. It didnt sell so we rented it out and I thought that it would be an investment (which it is) but because there wasnt a mortgage it became positive geared and I have to pay tax. I am single Mum and am paying the large mortgage for the other property and also have to find the tax. I know it sounds like I want my cake and eat it but any ideas on how to keep but not pay tax.
jolmur wrote:Hi I was living in a property that was unencumbered then my parents required care so we bought a place together and the property I was is was going to be sold to pay for new one. It didnt sell so we rented it out and I thought that it would be an investment (which it is) but because there wasnt a mortgage it became positive geared and I have to pay tax. I am single Mum and am paying the large mortgage for the other property and also have to find the tax. I know it sounds like I want my cake and eat it but any ideas on how to keep but not pay tax.
If the property is generating income, then you have to pay tax. The tax will be on the profit, after all the expenses are claimed for the property, such as rates, water, management fees etc.
One way to reduce your tax is to get a depreciatio nreport done for the property. This will cost approx $500, but may give you some extra deductions to reduce your tax. Depending on when the property was built, this may be a way to reduce your tax quite significantly.
I'd suggest that it isn't the tax that is causing the most concern, but the large mortgage. If it is proving too expensive to hold two properties, I'd try to sell the investment property. This will provide the most relief to your cashflow situation.
Dan42 wrote:I'd suggest that it isn't the tax that is causing the most concern, but the large mortgage. If it is proving too expensive to hold two properties, I'd try to sell the investment property. This will provide the most relief to your cashflow situation.
Agreed. If the property was negatively geared right now you'd be in even more trouble.
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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