Hello, Can anyone tell me what will happen if I rent my PPOR short term. I have bought interstate and will be moving in 2 weeks. Our house is on the market but hasn’t yet sold .I am going to maybe put tenants in on a short lease to help with the mortgage costs. Just wondering come tax time if I am going to be hit with a bill by doing this.Also are there any other problems I may encounter finacially doing it this way . It would really help if I could have the extra income .
Any advice would be greatly appreciated .Any costs incurred (included apportioning of rates etc) will be deductible expenses.
Any rental income earned must be declared as income on your tax return.
You can have two PPOR for a six month period of time while you try to sell one property. If the property sells within this timeframe then the sale will be CGT free – assuming it was your PPOR for the whole time you owned it.
You may have difficulties finding a tenant who is willing to move in for a period of time yet to be determined. Many tenants like having a definite time in residence period – the sting in the tail being that having a tenant in situ and on a lease can make your property less appealing to people looking to buy a home on normal settlement periods.
Good luck with it.
Derek
[email protected]
0409 882 958
Property investment advice and researched property in quality locations available.Hello Derek,
Hope your still there .
If the property rents for longer than 6 months while it is on the market what sort of CGT would I be looking at. The house has always been my PPOR.Hi Tass,
Not an accountant so take what I say with a grain of salt.
CG will be apportioned over the time of ownership. For example 10% of the property’s life is as an IP then the CGT will be levied on 10% of the total gains.
There was also some discussion about getting a valuation done at the time a property changes from PPOR to IP.
Suggest you search the ATO website – or if you want to PM me your email address I can forward you a copy of the CGT guide.
Derek
[email protected]
0409 882 958
Property investment advice and researched property in quality locations available.
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