Move in. move out.

under s118-145 ITAA 1997 a person can be absent from their main residence yet still count it as their main residence for it to be CGT exempt for up to 6 years. To get the full exemption you need to live in the house initially and establish it as your main residence. You can then rent it out and claim all associated costs – yet still retain the CGT exemption.

Hi Dru

Why not
1. Buy a place to live in and then rent it out. You can retain its CGT free status for up to 6 years. CGT could be considerable if you are sucessfull in adding value so it may be worth the hassle of moving in and out.

3. Def do the IO with offset. But, you say you want to pay down the principle of the second one – this is not adviseable as if you were later to buy a property to live in again then your cash would be tied up.

4. Yes, good idea. The only problem with super is that the equity in the properties cannot be used. ie you cannot borrow against the first one for the second. But it is still a good strategy as the properties can be CGT and income tax free once you hit pension phase or meet a condition of release. Super is also a great asset protection vehicle and generally falls outside your estate and there are tax benefits to your depenants if you were to die too.

What will your income be like when you are not working?

If might be better to open a savings account in your own name and earn some tax free interest and let your husband save more tax on the negative gearing – but this will depend on the savings rate.

I seen one on TV tonite which was around 6.01% at call for the first 4 months with Rabo bank.

me too

Lots of spam on this site.

My impression is that Cintaku wants to buy a holiday house but still claim all associated costs with it.

Yes, it would be possible, depending on the value and location etc.

But still not so easy. If you were working and had good income etc and both properties were taken as security and the LVR was less than 70% and your dad got independant legal advice then a private lender may lend to you. Probably not an institutional lender though.

Have you cross collateralised the loans?

Best way would be to set up a new loan on each property and use that as deposit. What LVR are they at atm?

If the property is available for rent then all costs would generally be deductible

John

Do you realise you can change names on title in VIC (between spouses) without stamp duty? (maybe just $50 nominal).

For CGT absence from main residence see s118-145 ITAA 1997. You can be absent for up to 6 years as still claim it as your main residence.

Thats not a legal question. Foreign investors still are restricted in what they can buy. I don't know if its too easy or not – its not something I have thought about before. There are certainly a hell of a lot of Chinese buying off the plan apartments at the moment. Not sure this is a good investment though so they will probably lose money – which would be good for the Australian economy!!??