Hi All
Within the next 12 months we will be looking at building our dream home. We plan to hold our PPROP which we will develop (duplex site) in the future.This will only work for us if we can claim tax deductions on our new PPROP.
My question is whether this is achievable via a trust, ie we rent it back and claim depreciation etc.
Thanks
(Hard work never killed anyone, buy hey why take a chance)
that is an interesting one and the first thing that springs to mind is whether the transaction is arms length. there may be a tricky way to structure it – lets hope an accountant forum member reads your post and can give some general advice.
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Don Nicolussi | Mortgage Broker - Home Loan Warehouse
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I am no accountant, but believe this is possible. You have to be careful though. The ATO has been looking at these sorts of arrangements and can disallow them if they think you have entered the scheme with the dominant reason to save tax. Ways to make it stronger include:
– Doing it for asset protection reasons
– The trust holding other assets
– Renting it to another family member (someone unrelated to the trust)But if you do this thing to watch out for include:
– Losing the CGT free status of your home
– Land tax on your home
– Paying extra tax on the rent you pay your trust when the property becomes +ve geared
– Extra accounting expenses
– Trusts cannot distribute losses (so you may need a hybrid trust).Better talk to a very good accountant.
Terryw
Discover Home Loans
Parramatta
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Hi DLPP
I think this can be done as I met someone years ago who mentioned this structure, he was partner/CPA in a large accounting firm in Perth.It would be interesting to know if anyone has actually done this.
(Hard work never killed anyone, buy hey why take a chance)
Hi Terry
I am going to contact a girlfriend who has found this brilliant accounant and lawyer and hopefully they can help with this.Thanks, will keep everyone posted.
(Hard work never killed anyone, buy hey why take a chance)
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