Hi folks,
We are currently building an investment property and renting at our PPOR. We are now thinking of moving into our investment property upon its completion in around 6 months time due to a change in employment and the fact that it will be the 1st home we have ever owned. I understand the CGT implications of this move but when we change the loan from an investment to a home loan, can we claim 1st home owners grant/stamp duty exemptions belatedly? If this change occurs next financial year will it effect whats happening this current financial year with respect to the tax implications of our investment loan? Is there anything else I need to take into consideration with a move like this?
Any help on this matter would be greatly appreciated.. Cheers in advance.I'm a bit confused. You are building and you will rent it out when it's finished THEN move into it?
If you intend to move in within 6 months of completion then you can buy it getting the FHOG. If you move in after 6 months it's too late, you cannot get the FHOG.
Thanks Catalyst,
Sorry for the confusion… we were going to rent it out on completion but now are intending to live in it on our own. ie make it our PPOR.
Cheers for your reply.Hi Catalyst you thought you were confused.
I am totally confused.
You say you are renting at your PPOR. (Is that "at" or "out").
If you are currently renting out your PPOR then you wont qualify for the FHOG or SD concession at all.
In regards to the FHOG you can actually move into the property one day short of the first year that the property was available for occupation or the property being ragistered in your name and occupy the property for 6 continous months.
You do NOT have to move in within 6 months.
If you clarify the situation for us then we can provide further advice.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Qlds007 wrote:In regards to the FHOG you can actually move into the property one day short of the first year that the property was available for occupation or the property being ragistered in your name and occupy the property for 6 continous months.You do NOT have to move in within 6 months.
You are correct. Thanks for clearing that up.
I think they mean they rent at their principal place of residence. Not that they own it????
GWing- So if you move in straight away what's the talk of CGT? And why do you need to apply after the fact? You still haven't made it clear.
Ok sorry guys….
Situation is we rent somebody else,s house as our PPOR. We are currently having an investment property built (with an investment loan) but are now considering moving into it ourselves on completion instead of renting it out. With reference to the CGT I was thinking of the land appreciating over the 12 months of the build as its currently classed as an investment. Do we pay CGT on the land component while the house is being built? (probably wouldnt be appreciating much at the moment at any rate!!). I am also interested to know if we change to a principal and interest loan next financial year when we move in will that effect all the tax deductions we are receiving this financial year from having it as an investment loan and build? Hope I,m making a bit more sense… Thankyou very much for your help.. P.S We live in W.A.HI GW,
Ahhhhh – I now see the confusion.
The term PPOR is a term only used for the place your reside in and own (or are paying off) – so really you are not living in your PPOR but are simply renting.
CGT is only calculated and levied upon the sale of the initial block of land. It will not be payable when you move into the house currently being built on the block. I'll have to look around the ATO website (or wait for a tax guru to come along) to determine if you'll eventually be liable for CGT on the land.
As you initially intended to build an investment property on the block you could well be entitled to claim interest, rates etc on the land as it was your 'intention to build' an investment property. This, by the letter of the ATO, does mean you are eligible to claim relevant expenses on the land.
Now that your intention has changed and you will be moving into the property any expenses incurred after you move in will not be deductible as there are no tax deductions for your own home. The cut off date is determined by when you move in – or even possibly when your intentions around this property changed.
Now all of that stuff is a little more complex than I made out so I suggest your grab your accountants ear for a few minutes to verify what has been said here.
PS I live in WA too
Thanks Derek.. sorry to confuse everyone.. bit of a novice at this stuff. Cheers very much for your help.
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