Hi there,
I am in the market for the next house given that I have a 15 month old and one on the way and living in a 2 bedroom semi (in NSW).
Which option sounds better:
(The semi is worth about $1mil, and we owe about $200k.)
1. Buy a bigger place (further out from where we are) for up to $1.1 – which may stretch the mortgage out to around $400 given transaction costs
or
2. Purchase the place that we can see ourselves living in in 3 or so years time for around $1.3 or $1.4, rent it out for a few years, rent a house out in the burbs ourselves and use negative gearing to help out?
Do people use negative gearing for the house they want to live in or really only for IP's
If you don option 2 you could not claim CGT exemption until you have lived in it. So a better way may be to live in the property initially, establish it as your main residence, and then rent it out for up to 6 years while claiming negative gearing benefits.
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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