We've bought a house just over a year ago and still has a large mortgage on it. we're thinking of getting it rented out as the area we are in have a promising rental return and intend to move and rent out somewhere else (cheaper).
does this have any financial benefit/s?are we able to claim on our mortage repayments and etc like any other rental property (negative gearing)?
with the rent that we will be receiving on our PPOR will this be added to our taxable income? and if so could we still negative gear or claim deductions?will this strategy help us reduce our mortage quicker?
any advise will be highly appreciated thank you.
Could it be wiser finding 2 very cheap investments, sitting back doing the research, making sure the numbers add up, and try to make the money to pay off your house? Have you considered that all though cheaper to live but travel distance is greater to work or such areas of recreation and would cost you more in fuel, in multiple cars? Or that other things change to where you will move to and cost more on any road tolls?
This just an example to look on when considering what your doing, a lot of people think it’s a great idea what your doing and actually think there going to save money when really there not and going broke even faster.
Hi. If you have a large mortgage (as you do) it can have great benefits.
Yes the rent is added BUT you deduct the interest as a tax deduction + other things.
Do the sums. Add interest + land rates + water rates + insurance. Minus rent. The amount left is what you claim as a tax deduction. There are other things (like depreciation) but I've just simplified it.
If you move back in within 6 years you will NOT pay capital gains tax (assuming you do not buy another house to live in). Commonly known as the 6 year rule.
Any more questions just ask.
Hi Savannah
Welcome to the forum.
Catalyst has answered your questions. If you’d like to get an idea of how much your property will cost to hold per week (and as a result, how much you’ll be able to claim) you can have a play around with this calculator – http://www.passgo.com.au/pass-go-investment-property-analysis-tool
Cheers
Jamie
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]
thanks kindly for the advise. it really helps.
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