Hi there
We would like to buy a bigger house and rent out a part of it to assist with paying the mortgage. I would like them to install a second kitchen so it can be a house share with own amenities. Thus we can avoid land tax on another investment property. HOWEVER, I have read on this forum that if you put in a new kitchen it would make it second dwelling and if you get sued for something your insurance won’t cover you etc….but I cannot find anything in the State Environment Planning Policy (it covers gazebos and BBQs but not kitchens).
I contacted my local council and they told me I would have to get a DA for the kitchen and also I would be running a Boarding House and got zero guidance and wasn’t referred to any legislation I would need to comply with.
Has anyone done this and not ‘risking it all’? If so, what do I need to do? Any advice gratefully received :)
Don’t assume you can avoid land tax, your main residence may be subject to land tax, in some states, if it is income producing.
you should look at the insurance contracts, not the EPP for the insurance question. Look at the boarding houses act
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Are talking about splitting the house and you occupying part and renting out the other part?
If that is the case you need to submit it to council and you will be required to put a fire wall between the 2 residences to make it legal. Without that, as you say, your insurance will wipe you. To install a second kitchen you should get council approval but just doing this will not make it legal to rent that part out separately. You may be able to have a relative stay in that part.
We have done this. PM if you want more details.
Thank you guys. Am starting to go off the idea….
As stated its much more complicated than just building a kitchen. There are other ways to plan minimal land tax across a portfolio. In my view there are problems with contaminating the PPOR as income producing so this may not be the best way forward.
What is more important is having a set of goals to start with. Work backwards from that. What do you want property to help you achieve? Think about what kinds of properties will be the best vehicles to arrive at that destination.
BuyersAgent | Precium
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Email Me | Phone MeSouth Coast NSW Independent Buyers Agent - Wollongong to Batemans Bay and Regional NSW. DOWNLOAD OUR FREE 14 POINT PROPERTY BUYER'S CHEATSHEET to avoid painful mistakes at precium.com.au
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