CGT, FHOG, -ve gearing, etc

[cutegirl]

Hi all,

I am looking for some advises, regarding to my situation. Currently, I have my first property (and been granted of FHOG). The settlement for this would be next month. I’m planning to move in next July, and one of my friends agrees to rent my property until July. The questions arise here:

1. Am I still eligible for FHOG, assuming I rent out the property first to my friend, then I will stay in the property continuously after that.
2. If the answer is yes, how about the “repairs” that I will make during the period of April – June (when my friend rent it). Will it be tax deductible?
3. The rent and the bond, is that can be used as a negative gearing (if my loan mortgage is greater than the income)
4. I heard about the 6 years CGT exemption, if I rent it out first before I occupy it. What is this all about? Is that relevant to my situation? When is the CGT exemption going to start (in April or July)?

I am willing to purchase my 2nd property as well (say in late 2005) for investment. Assuming, I want to sell my PPOR in 2008, and keep my 2nd property as my investment (as a result, I am renting with somebody else now). Is the CGT exemption still applied (for selling PPOR)? Or I still need to pay the tax (at the rate of 24.25%)?


Thank you,

[TryHard]

Cutegirl

Sorry I am no FHOG expert as I missed the benefit of that one :( (but I think what you meant was you will move straight in in July, and your friend will give you some weekly cash gifts between now and July, which have nothing to do with rent, and you can't help it if they squat in your vacant house, which you know nothing about ;-) ) ...

Your PPOR will be free of CGT provided you didn't rent it out prior to moving in, and if you move out (and not into another PPOR) and move back into it, you are away no longer than 6 years.

Have a look at :
http://www.somersoft.com/forums/showthread.php?t=18082

... but can I ask why you would consider seeling the PPOR in 2008 and lose all the future growth in that asset ?

As a general concept if you look around this forum, people only sell property if they bought badly or something better comes along that they must release the money for, but banks will lend against the equity you hold in the first property to buy the next one.

Have a look at this thread :
http://www.somersoft.com/forums/showthread.php?t=19649&page=1&pp=15
as an example maybe ?

Basically, if you do a search for the terms you'be mentioned, you'll find lots of stuff already here on the forum

Good luck !
TryHard

[twodogs]

.3. The rent and the bond, is that can be used as a negative gearing (if my loan mortgage is greater than the income)


In NSW, that bond money is not yours, it must be lodged with rental bond board, to hold it yourself is not right.