Hi all,
First off, this is my first post to these forums. I have been a member on PI.com for some time now and regularly read the posts within. Thanks in advance for any input and advice given from the other experienced investors on here.
I am inquiring about the positive and negatives in declaring income and claiming tax deductions from my PPOR and if anyone has had any experience within this field.
I have a 2006 built 4 BD 3 BA property with 3 people renting rooms and myself also living there.
Would it be worth getting a depreciation schedule written and if so how would I go about claiming the depreciation on plant items and capital works? Would I simply claim the fixtures and fittings in the rooms rented by 100% and the common areas at 75%?The advantages I can think of include:
-Claiming a tax deduction on a percentage of expenses
-Claiming depreciation of a percentage of plant items and capital worksThe disadvantages I can think of include:
-Declaring income (may raise income tax)
-Future CGT if/ when I decide to sellCan anyone provide any other advantages/ disadvantages?
So far it’s sort of 50-50 to me.Any feed back is much appreciated!
Depends on the circumstances. If your main residence becomes income producing the cost base will be reset to the value at that time. When you sell it will be subject to CGT, usually based on the % you rented out.
But you may be able to claim or depreciate furniture, claim a % of all costs etc. It may help you save tax, produce more income, which can then be invested and start producing compounding returns.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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