I would like to know the suggestion from forumites
I have a PPOR in newcastle which I have already paid off (not using offset account – mistake!). I am going to Perth/Sydney next year because of job commitment. I am thinking about buying another property due to recent economic downturn and plenty of cash sitting in the term deposits.
I know it is a common problem… but I can't decide what to do.
Option:
1. Transfer it to DFT and rent it out so that I could transfer the rent money to my wife (lower income than me) – risk of land tax/Stamp duty etc.2. Rent it out and make it as IP and purchase another PPOR when I am going to sydney/perth
3. Any other sugggestion
Thank you
Land tax is state based. So by purchasing in another State you minimise land tax.
Transfer to wife or DFT will incur capital gains tax and Stamp Duty.Possibility .
Rent a house in new state of Australia and hold on to PPOR exemption on Syd for 6 years. Use rent income from SYD to pay rent in other state.
Buy another house in new State as an investment property and pay it off ASAP.
(You can borrow against expensive PPOR as a line of credit for the deposit on the next investment property)It depends on your strategy
Are you after negative gearing tax reduction or positive gearing.
You could buy a cheaper PPOR and use the rent from Syd to help pay off the loan quickly. It is really a personal choice as to what your plan should be.
Hello G-O-M
Are you planning to move permanently to the new state?
If this is only a temporary move then ducksters suggestion of renting there yourself and buying an IP in the new state makes good sense. The interest on the new loan is fully tax deductible and as he has already pointed out, your current PPOR remains CGT free for up to 6 years this way. I think this is the least expensive option if you are not averse to renting. Do not pay off loan ASAP, use offset account. Same result, full flexibility.
If you don't want to rent your idea of selling to a DT is good as it will free up the equity in your current PPOR but don't forget if it's negatively geared then the loss is trapped in the trust.
Cheers
ElkaThank for you input
my dilema is if i m renting out my current PPOR, it will be taxed at the highest margin and I have fully paid my current PPOR.
By diverting it to DFT, I am able to channel the rental income to my wife.. but the set back is the cost….
I m not sure which one has the best option in the long term….With the downturn in property market, I think that it is good time to sell to DFT and generting less CGT??? Do I still have to pay CGT if I am selling it to DFT?
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