All Topics / Legal & Accounting / Living in a half own investment property. How does this work in terms of tax reduction?

Viewing 6 posts - 1 through 6 (of 6 total)
  • Profile photo of hugoismydoghugoismydog
    Participant
    @hugoismydog
    Join Date: 2011
    Post Count: 17
    March 27, 2013 - 3:16 am

    Hi all,

    I need some help with this issue. My sister & I bought an investment apartment together 50/50. Soon it will be completed end of 2013. 

    I plan to move in but pay half the market rental fee to my sister. 

    How does this work as an investment property with tax reduction? I will not be receiving half the rent so do I need to declare income? Will this affect any taxation purposes as investment reductions?

    Any thoughts & leads would be helpful.

    Thank you.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    March 27, 2013 - 3:23 am

    Think of it as 2 distinct interests like 2 separate properties. You will be living in your sisters property and paying market rent. You will be living in your own property at the same time so you would have no tax issues. Your sister would be able to claim her expenses if you are paying market rent and she is not living there.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of JpcashflowJpcashflow
    Participant
    @jpcashflow
    Join Date: 2007
    Post Count: 575
    March 27, 2013 - 3:40 am

    Hi,

    How long are you planning in living their? My question is this.. Sure you might get some tax benefits now but if you sell you have to pay capital gains..

    If you are intending in living their you might as well keep at your own property and pay no tax if you sold it later on.

    So my questions is what is your future goal with this property?

    Jpcashflow | JP Financial Group
    http://www.jpfinancialgroup.com.au
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    Your first port of call in finance :)

    Profile photo of hugoismydoghugoismydog
    Participant
    @hugoismydog
    Join Date: 2011
    Post Count: 17
    March 27, 2013 - 6:02 am

    Hi Johann,

    So are you saying that its better I just live in it and not pay rental to my sis. & when I sell it I don't need to pay cgt??

    Is that correct?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    March 27, 2013 - 9:34 am

    Is your sister going to live in it? She may have to pay CGT.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of hugoismydoghugoismydog
    Participant
    @hugoismydog
    Join Date: 2011
    Post Count: 17
    March 27, 2013 - 11:49 am

    Terry -sis is nt goin to stay. 

    Cgt is only less wen the owner of the property has stayed there for how long? Do we both need to stay there?

    most likely we will rent it out n sell it for CG   

    Tq all

Viewing 6 posts - 1 through 6 (of 6 total)

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