Hi all,
I am trying to clarify my situation and how to best structure it regarding capital gains tax and tax deduction. I just bought a new IP (very large house which I plan to create two seperate units and rent seperately). However, my situation has just recently changed, and the location of this IP suit me better as short term residence thus I plan to move in to one unit (half of the house) and rent out my PPOR for a while.
My question are:
– WHen I move into half of the IP, can i still treat them as 100% investment but I will pay 50% rental and tenants pay for other half (tax deductable)
– Or when I move in this unit, it appear I treat them as my place of residence; therefore CGT will apply to my PPOR.
Any ideas/comment would be much appreciated.Since you are going to rent out half, you cannot treat this portions as your main residence. You could treat the portion you are living in as the main residence and apply the CGT exemption to this, but you can only have one main residence so your oriiginal home will attrtact CGT if you do this. What you can do is to treat the one with the biggest growth as the main residence, i e that one that will save you the most tax.
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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