Renting out ppor

[Chloe]

Hi guys,

I haven't been on here for a while but in the meantime I have bought a ppor and am now thinking of options.
One option is renting it out and renting myself as I'd like an extra room so my kids don't have to share. I'm a single parent and at the moment can't afford to buy a bigger house.
A close friend of mine rents her house out, it's positively geared and she seems to get a great tax return every year. My house was built in 1950, is it still worth getting a depreciation schedule?
My home will also be positively geared by approx $100 per week. Of course agent fees etc will need to be paid for.
Any advice would be greatly appreciated.

Thanks!

 

[D.T.]

Did you get 1st home buyers grant with this? If so, you may need to satisfy that first?

Get some tax advice re CGT ideally you'd want to keep future sale CGT free so look up how long you should move into it before you move out.

Talk to Depreciator regarding dep schedule. He'll be able to let you know if its worth preparing one. At 60 yrs old the result is likely to be low - has anything been added or renovated more recently?

 

[Jamie M]

Get some tax advice re CGT ideally you'd want to keep future sale CGT free so look up how long you should move into it before you move out.

Yep - on that note, get it valued too so if CGT is ever triggered you'll be able to accurately work out what's payable.

Cheers

Jamie

 

[Chloe]

No first home owners grant and I've been living here for 2 years. Not sure if that makes any difference.
The previous owners updated the kitchen but nothing amazing and modern.

 

[Big Will]

Will be some depreciation on the kitchen but unlikely on anything else or minimal, however I am not an expert here.

If you never claimed FHB grant then there isn't anything you need to meet but you would of satisfied the FHG grant if you did from my knowledge.

Def get it valued so you don't have to pay GCT if you trigger it.

 

[travelbug]

If you are going to rent yourself (ie not buy another property) then you can rent it for 6 yrs without having to pay CGT.

There can be good tax benefits to renting your PPOR and renting yourself. Crunch the numbers.

 

[Chloe]

If I change my mortgage to interest only, is it all tax deductible?
My friend pays no tax on the extra money she gets from the rent, her accountant does her tax. Does this sound correct?

 

[Terry_w]

If I change my mortgage to interest only, is it all tax deductible?
My friend pays no tax on the extra money she gets from the rent, her accountant does her tax. Does this sound correct?

Depends how you structured your loan. The interest on the part of the loan associated with the purchase of the property would be deductible. But if you had redrawn to buy a car this portion wouldn't be.

No tax may be payable depending on a few things such as non cash deductions such as depreciation, but also your other income.