Hi Everyone
I have just joined membership to this great website. I have read all the great advice people have given and I would appreciate any help to my problem.
I own a property in Sydney [had a deposit and got the rest on an investment loan] which was being tenanted to someone who I evicted a few months ago. My Boyfriend and I have just bought a property together in Adelaide [this property in Adelaide is in both our names]. We got a combined loan using my property /loan as equity.
My boyfriend has now just moved into my place in Sydney and my question is for taxation purposes can I still claim my property as an investment property? I’m pretty sure I should be able to since the property in Sydney is under my name but my boyfriend is a bit unsure as we have now combined the loans.
Thanks
Maria.
Maria,
There should be no issue that your boyfriend rents from you. Anyone can own a property and rent. From a taxation viewpoint as long as the rental is at a market rate, then from a deductions side, there are no complications.James
Thanks very much James. I was pretty sure that it should be ok but my boyfriend was concerned and I guess I just needed some piece of mind.
Thanks again
Maria.[^]
Thanks very much James. I was pretty sure that it should be ok but my boyfriend was concerned and I guess I just needed some piece of mind.
Thanks again
Maria.[^]
Hi Maria,
You will need to fully think this scenario right through.
Yes you will be able to use your partner’s rent as an income stream to create deductible expenses.
However, as I understand it, your deductions for costs will be apportioned against the part of the part of the property your partner uses – in other words you will not get 100% deductions.
In addition you will also trigger a CGT event which can have long term taxation issues.
I would recommed you discuss the matter with an accountant and balance up the long and short term gains with costs.
If cost sharing is an issue – maybe your partner could pay for all the groceries etc and live ‘free’ – thus obviating the need for any payment of rent, thereby avoiding a CGT event.
Derek
Hi Derek
Thanks for the advice. I will definately check all that out. Sorry this is probably going to sound like a dumb question but what does CGT stand for??
Maria.
Hi ignore that question I just figured it out! Capital Gains Tax!
MARIA
Your boyfriend lives in your IP ( Investment Property ) you live elsewhere..’right’ ?
If so, as said by georgisj as long as the rental is at ‘market value’ ( no mates rates )keep good records of rental payments, all bills, phone etc in his name! you should have no drama’s..As for apportioning part of the deductions available, it’s my belief that would only be applicable if you were co-habiting..
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Hi Redwing
You are correct, my boyfriend has just moved in while I live at my parents house and the rent that I am charging is basically what the market value is at the moment in the area. All the main accounts [phone, electricity etc] are now all in his name. It is a tenant/landlord arrangement [we have signed lease documents, i have lodged a bond etc]. I guess the only difference is that as a landlord I get to see my property pretty much all the time! haha.
Yeah my fault sorry I should have put that in my opening post! Thank you everyone for the great advice.[^]
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