Hi
I am about to purchase a PPR but I want to continue renting it out to the current tenant in the short term. (current lease is to Oct 2007) What are the rules about how long you can rent a PPR property out for before moving in and are there any particular impacts of doing this that i need to be aware of?
Cheers, KarenHi Karen,
A couple of very important things to consider here;
1. If you rent it prior to living in it, then when you sell there will be CGT on a proportional basis of the time rented compared to total ownership period.
2. If you live in it first and occupy as your PPOR, then rent it, when you sell you can claim the PPOR exemption for up to 6 years, if you choose and are eligible, ie you can only have one PPOR at a time.
3. To gain the PPOR exemption you must actually occupy or genuinely intend to occupy the premises. There is no black & white rule as to how long, just that you occupy it genuinely as your PPOR.
hope this helps
In addition the FHOG legislation allows for you to rent it for 364 days before you move in.
You need to occupy the residence within the first 12 months and then occupy it for a minimum of six months.
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi
Thanks for the responses.
Unfortunately is as i expected re CGT but glad i asked.
And not eligible for FHOG due to previous purchases so that option is a no go.
Cheers, KarenHi all,
I am new here. Could you kindly let me know to what you refer to: PPR, PPOR and FHOG?
Thank you so much (I am new and learning)
Cheers,
Tera[blink]Hi Tera
PPR/PPOR = principal (personal?)place of residence, i.e., where you live – not an IP (investment property)
FHOG = first home owner’s grant
Cheers
MargHi marg,
A little bit late, really sorry, but thanks so much for the most useful enlightment.
Cheers,
Tera
Trajik
I recall reading somewhere that you can still class a place as your main residence as long as your live in it as soon as practical after settlement. have you heard of this before, or am I imagining it.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hello Terry
You may have read it on the ATO site. Here is the link to the appropriate section
http://www.ato.gov.au/individuals/content.asp?doc=/content/36888.htm
but unfortunately they specifically exclude the scenario above
"If you could not move in because the dwelling was being rented to someone, you are not considered to have moved in as soon as practicable after you acquired your ownership interest."
Doesn't seem fair.
Hope this helps
Elka
Thanks Elka, knew I had read it somewhere – but as you said it may not apply here.
But the 6 month overlap rule may apply – Karen may be able to claim both as the main residence for a period of 6 months. See Elka's link above for an example.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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