All Topics / Help Needed! / First home buyer looking to turn into rental

Viewing 4 posts - 1 through 4 (of 4 total)
  • Profile photo of xlrdeanxlrdean
    Member
    @xlrdean
    Join Date: 2011
    Post Count: 2
    March 12, 2011 - 5:47 am

    Hi everybody

    Ive been living in the house i built for around 2 and a half years now, and been working for my own business for around 9 years. I was told that I can rent out my house im in now and go rent with friends I can claim tax on my rental also I can claim on the rent i am paying at the new place because i will be setting up an office for my business in the house. What are all the processes involved with that? Its cheaper for me to move out and use the income from my property to help pay my mortgage. Im not ever planning to sell because i want to keep it as a investment property while i save up to by another one day down the track.
    I am really new to all this so any help would be really appreciated. Im living in WA so if any one could also give me contact details of a good financial advisor that would also help

    kind regards

    Dean

    Profile photo of angelinsydneyangelinsydney
    Participant
    @angelinsydney
    Join Date: 2011
    Post Count: 270
    April 1, 2011 - 7:31 pm

    Hi all,

    I brought this back up as Dan didn’t get a response. I don’t like to give an opinion re his query on taxation, though I know a bit about it, is not my cup of tea.

    My only advice, Dean, is ask your business accountant. He should be able to clarify this.

    Take care.

    Angelina

    Profile photo of Ryan McLeanRyan McLean
    Participant
    @ryan-mclean
    Join Date: 2010
    Post Count: 547
    April 4, 2011 - 1:41 pm

    Definitely ask your business accountant. But yes, in most cases you should be able to claim tax on the interest on your investment property…that is if you are earning less in rent than you are paying in outgoings.

    I have heard that when it come to home offices you can only claim a portion of your rent. It depends on what percentage of room you use for business. I think they measure it per square footage. So if you have 40 square metres and you are using 10 square meters for work the you can claim 25% of your tax.

    Why not stay living in your own place and get your friends to rent a room??? That would help you pay down your mortgage.

    It might help you pay off your mortgage quicker if you are earning more in rent than you are paying in rent. Investing for the long term! You are a very clever man. Why only own one property when you can own two and have them both working for you???

    Ps. None of the above is financial or taxation advice. Always talk to a registered professional

    Ryan McLean | On Property
    http://onproperty.com.au
    Email Me

    Profile photo of xlrdeanxlrdean
    Member
    @xlrdean
    Join Date: 2011
    Post Count: 2
    April 5, 2011 - 3:09 am

    Thankyou for your comments,
    Ive recently seen an accountant who told me that If i set up an office at home then it that is the same as renting the entire house out. The rented room that will be my office in my own home will make my property an investment property and i will have to pay capital gains tax if i sell. it only for me worked out that i could claim only 5% and so in the long run that wouldnt help. The best thing I did (which I read off an others topic) was because I have an westpac rocket repay account it came with a free offset account which all my income get put into that and also a free low rate credit card so i can spend with that and just pay it off monthly before interest is calculated leaving my entire income offsetting my home loan. That was some great advise. now i can save for my next big investment adventure.

    Thanks all

Viewing 4 posts - 1 through 4 (of 4 total)

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