Mike,Remember that you are also better of defering incurring of investment expenses, like getting a depreciation report, or fixing things on a property until it is a rental. That way the expenses are deductable in the year incurred.

Corey,

3 things stand out on your hypothetical as limitations or barriers to your goal – “building a bank to purchase a home”
1) 10-12 hours of work a day
2) 50+% of your disposable income on rent.
3) short term investing in property.

The work hours will restrict you ability to add real value through renovation if you plan to do it yourself. You…[Read more]

For your PPOR to be possibly exempt from CGT you must also have moved into it as soon as practical. Eg. You can’t have left a tenant in there until the lease expired, and you can’t just let it sit there until you decide to move in (unless say you are renovating it to move into).

With regards to the question about the 6 year rule for exempting…[Read more]

No worries Jamie,

The reply just made it sound like a person would miss out on that deduction if they didn’t pay to have the report done.

I was just trying to make it clear that there is is an alternate to QS doing it for you, $200 is good, however some QS’s will charge $500 for the same service.

Cheers

Jamie,
You obviously did not read the entire post or understand the post. I was not saying do not claim depreciation, I’m saying that there may be circumstances where there may be no need to commission a QS to do it for you.

I still claim depreciation on pre 85 properties. I have a pre 85 IP that I settled 2 weeks before the end of a financial…[Read more]

Ricky,

If the property is pre 1985 and not really had any work done to it, then it’s not worth getting a depreciation schedule done for the building.

You can’t work out the costs of a building costs for capital allowance.
However, you are allowed to come up with your own value for depreciable assets.
I have a couple of pre 85 investment…[Read more]

If you rent out the townhouse it will only become liable to CGT once it becomes an Investment property when you buy a new home and make the new home your PPOR.
The tax is then based on the period when the townhouse became an investment property (when you bought the new home), until the date you sell the townhouse, divided by the total time of…[Read more]

Thanks for the well researched response Mr501.

I did much reading of the ATO site and relevant tax ruling.
I just wish I’d read your response prior to contacting the ATO to use in my argument.
TR 2004/4 covers the interest side of things ok. http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR20044/NAT/ATO/00001

After speaking with someone at…[Read more]

Thank you Glenn Stevens.

After being made redundant late last week, I though for sure I was going to get a kick while down.

Lashed out and spoilt myself, upgrading from nothing for the past 8 years to a 93 Toyota Hilux Duel Cab Ute.It's great to be able to use my trailer without having to borrow a car.

ShereeI don't think that the above responses answered what you were actually asked.You don't want to backdate depreciation , so much as transfer losses to future years.I'm pretty sure that you can carry forward income losses to future years, until the loss is exhausted, similar to that of a Capital Loss.If you had income that was taxed (PAYG) say…[Read more]

I think in this market buying a property that needs major renovation as opposed to a property that any hack can touch up, is a better idea. The property needs to be significantly lower in value to it's surrounding neighbours, where it will be virtually impossible to over capitalise.My wife is currently renovating a 3br house purchased for $…[Read more]

I've always used Washington Brown and have been happy with the reportswww.washingtonbrown.com.au/

Reeco,Start by going out there and finding a lender who will lend you money, and get pre-approval.This will allow you to eliminate what you cannot afford. When you have worked out what you can afford remember to leave some money in the kitty to do the required sprucing up of the place. 

If you have capital losses carried forward from previous years then the Capital Gains are offset against the losses prior to the 50% discount. Carried forward loss – $10000Gapital Gain – $42000Net Gain – $32000Capital Gain after 50% Discount  – $16000

I would definitly go with the building report. I've had building reports done on a unit within a block of units where I already own a unit.The report showed up damage to the bathroom that had been fixed, but was still an issue.I negotiated a reduction in price of $2500.

You won't be exempt from having a capital gain , buy yes it would likely be beneficial to sell in the next financial year.  Your capital gain net of any capital losses (less 50% if owned for more than 12 months) is simply added to your income and paid at your marginal rate. So if you have next to no income in a particular year you will be much b…[Read more]

I'd look for something that I could fail at.  A challenge is good for you so is failing, as long as you learn from it. Higher risk, better reward.

I wouldn't consider requiring LMI as having oodles of equity. If you can, upstamp your existing loans to 80% so that no LMI is required.Use that as your your deposit and only purchase something that will only require a small amount or no LMI.If servicibilty really is an issue for you and not just an on paper issue for the purpose of getting a…[Read more]

I'm in Sydney and all of my investment properties are interstate. It's not a barrier, infact I think that you tend to put a lot more effort into researching an area and doing the numbers, making sure you have finance etc, before  you jump on a plane and start to look at physical properties.I must admit though  that a friend was looking at pr…[Read more]