I am new to this site and was wondering if I can get some advice on if I should be negatively gearing a flat in London. I have recently moved here and am yet to figure all this out. I will speak to an accountant but thought I could some background from all you experts here. The flat is currently being rented out and that money is covering the mortgage repayments just (with a little extra – which just covers building admin fees etc) Rates just went down to 1% – incredible!. I am also in the process of paying back an interest free loan on a massive building repair which happened about 2 years ago. It was 14K – just for our flat which is a massive amount when you multiply with the other the 9 flats – but that is another story. (They are council flats and they got tenders etc for major building works including re-tarring the roof, retaining wall repairs, painting common areas etc – I am sure you get the idea) I mention that as maybe I can claim those expenses???
I also have a mortgage here on the house I live in. So I think I may be able to negatively gear the London one? Is it going to be beneficial to do so! Appreciate any information on this.Apparently it depends on when prior to 1 July 2008
deductible expenses on an overseas property can only be deducted against foreign rental income or other foreign modified passive income such as royalties and dividends.After 1 July 2008
http://www.ato.gov.au/individuals/content.asp?doc=/Content/00107951.htm&page=5&H5
It can be claimed against domestic incomeI do not know what the term domestic income means,
an accountant would know what this actually refers to.duckster wrote:Apparently it depends on when prior to 1 July 2008
deductible expenses on an overseas property can only be deducted against foreign rental income or other foreign modified passive income such as royalties and dividends.After 1 July 2008
http://www.ato.gov.au/individuals/content.asp?doc=/Content/00107951.htm&page=5&H5
It can be claimed against domestic incomeI do not know what the term domestic income means,
an accountant would know what this actually refers to.Actually, before 1/7/2008, the interest would have been deductible against domestic income but yes, from 1/7/2008, the entire net loss can be used to offset domestic income.
The term "domestic income" refers to income sourced in Australia. They have to differentiate it from "assessable income" because the worldwide income, as opposed to just domestic income, of Australian tax residents is assessable.
Eddie
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