Changing from PPOR to IP - am I on the right track?

Viewing 7 posts - 1 through 7 (of 7 total)

sdem
Member
@sdem
Join Date: 2007
Post Count: 14
April 5, 2011 - 8:59 am
Hi all.
Two years ago I bought my first home. Due to the family being unhappy with our tree change we moved back into a rental property in Melbourne a month ago and my house is due to be tenanted at the end of this month. I just wanted to see if I’ve covered all bases as I’ve never owned an IP before…
I have landlord’s insurance and building insurance. Dropped the contents insurance.
Have an agent (don’t want to be caught up in the management of the property).
I haven’t informed anyone that my home is now an ip – do I need to formalise this? With the ATO or bank or anything?
Planning on getting house valued and have quantity surveyor come through before tenants move in (although I think the house was built prior to 1985).
Is there anything else I should be doing? I briefly considered changing loan to interest only, but it doesn’t actually make a huge difference to the amount in repayments so I think I’ll keep it P&I – unless anyone strongly believes otherwise…?? I plan on buying another IP next year, so the more equity I have in this house the better I think.
Cheers!
god_of_money
Participant
@god_of_money
Join Date: 2008
Post Count: 970
April 5, 2011 - 9:23 am
I/O only account with Offset
Jamie Moore
Participant
@jamie-m
Join Date: 2010
Post Count: 5,069
April 5, 2011 - 11:59 am
It would be worthwhile having it valued or getting a market appraisal from a local real estate agent. This is done for CGT purposes. Basically, when selling the property, you only want to pay CGT for the portion of time it was an IP. By getting a valuation now, you’ll be able to provide evidence to the ATO that the property was worth $x when it became an IP.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone Me
Mortgage Broker assisting clients Australia wide Email: [email protected]
sdem
Member
@sdem
Join Date: 2007
Post Count: 14
April 6, 2011 - 1:45 am
Thanks Jamie. I’m assuming it’s good to have a high valuation then, to reduce the amount of capital gains. Will any real estate agent do this?
PS – I rang the council today to find out the age of the house for the depreciation schedule and they want to charge me $45… is there anywhere else I can find out when the house was built? It’s not in any of the info I received when I first bought the house.
Cheers
beanz
Participant
@beanz
Join Date: 2011
Post Count: 7
April 7, 2011 - 11:14 am
Jamie M wrote:
It would be worthwhile having it valued or getting a market appraisal from a local real estate agent. This is done for CGT purposes. Basically, when selling the property, you only want to pay CGT for the portion of time it was an IP. By getting a valuation now, you'll be able to provide evidence to the ATO that the property was worth $x when it became an IP. Cheers Jamie
Can you just get a market appraisal from a Real Estate Agent? I thought it had to be a valuation from a valuer?
Jamie Moore
Participant
@jamie-m
Join Date: 2010
Post Count: 5,069
April 7, 2011 - 11:36 am
My accountant advised that an appraisal will suffice.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone Me
Mortgage Broker assisting clients Australia wide Email: [email protected]
Jamie Moore
Participant
@jamie-m
Join Date: 2010
Post Count: 5,069
April 7, 2011 - 11:37 am
sdem wrote:
Thanks Jamie. I’m assuming it’s good to have a high valuation then, to reduce the amount of capital gains. Will any real estate agent do this?
Spot on.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone Me
Mortgage Broker assisting clients Australia wide Email: [email protected]