2 PPORs for married couple?

Discussion in 'Accounting and Tax' started by Jom, 15th Apr, 2008.

  1. Jom

    Jom Member

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    Quick question

    I am about to be married. I have a PPOR, and my fiance also has a PPOR.

    When we marry, the plan is for her to move into my place with me.

    My question is whether we are able to keep her place as a PPOR for her for tax purposes? We would like to be able to keep it for a few years as an investment and then sell it CGT free. We would also like to sell my place CGT free. The plan would then be to combine the money from both our PPORs and buy a nicer PPOR where we will be able to live for many years to come.

    Thanks in advance.

    :)
     
  2. The Y-man

    The Y-man Member

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  3. Mry

    Mry Member

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    Couples can only choose one place between them as a PPOR. Sorry.
     
  4. The Y-man

    The Y-man Member

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    There you go Jom - Do NOT get married until you offload the property :D

    Cheers,

    The y-man
     
  5. Mry

    Mry Member

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    If they live together, they are treated as a couple, married or not.
     
  6. The Y-man

    The Y-man Member

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    Doh!

    The Y-man
     
  7. ianvestor

    ianvestor Future Middleman

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    Regardless of whether you're a couple or not, if she principly resides anywhere besides her place, then she can't claim it is her PPoR. That's why they call it a principle place of residence.
     
  8. asdf

    asdf Member

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    I have always been a big advocate of NOT getting married for this simple reason. The banks marks your serviceability numbers down while govt sees you as one entity so cut half your benefits and entitlements but will get their pound of flesh and tax you on an individual basis. So I ask whats the point of getting LEGALLY married? You can achieve the same outcome by being housemates and maintain a business like arrangement. Isn't marriage an arrangement of sort? Afterall, LOVE should be a mental state and not simply a registration of names in a decrepit database down at the BDMs.

    A lot of hanky panky goes on between housemates anyway so I would like for the ATO to re-clarify the definition of "living together".
     
  9. Mr. Fabulous

    Mr. Fabulous Thought Criminal

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    Amen to that brother!

    Mark
     
  10. asdf

    asdf Member

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    As I alluded to in my previous post re being housemates, if she moved in with the new housemate/hubby and elected the 6 year PPOR exemption to apply to her PPOR, she can have her cake and eat it too.
     
  11. jrc

    jrc Member

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    asdf if she makes that election to treat her house as the PPOR then thye would lose the PPOR exemption on his house wouldn't they
     
  12. alexlee

    alexlee Member

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    What asdf is saying is that if they only live as 'housemates' then they might not be considered defacto. I doubt this arrangement would survive an actual ATO inspection, though.
    Alex
     
  13. Perp

    Perp Member

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    Tax is not a penalty that one should manipulate their circumstances to try and avoid; it's the means by which we collect necessary contributions for the common good.

    If you get married (or live together), one of the properties becomes an investment and thus the capital gain becomes taxed. But you gain (from a financial perspective) in two ways:

    1) You achieve economies of scale by only having the costs associated with running one household instead of two.

    2) Your income situation improves. If the property is currently negatively geared, you'll gain some tax benefits. If it's positively geared, then you're obviously getting a lot of extra income by renting it out rather than occupying it - either way you're ahead. ;)

    Choose which house you want to live in, get the other one valued (because you only pay CGT on 50% of the future growth, not all of it), and move on. If you choose her property to be the investment, and sell it in the future when she's home with babies and not earning an income (not that I'm saying that you should do this, I'm saying IF you do this), then you may end up paying no or very minimal CGT anyway.

    It all works out eventually - don't sweat it.
     
  14. alexlee

    alexlee Member

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    You're not claiming all the deductions available to you under the law in order to provide more money for the common good, then?
    Alex
     
  15. Perp

    Perp Member

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    :rolleyes: No, actually, I'm not. But that's more because I can't be bothered doing all the paperwork to support them than because it's a donation, but that's an entirely different matter.

    Alex, if you can't see the difference between claiming all deductions you're entitled to, and attempting to manipulate your circumstances with an intent to defraud, then you're not half so intelligent as I'd previously assumed.
     
  16. alexlee

    alexlee Member

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    I don't plan on doing anything illegal with taxes, only because I don't think the returns are worthwhile. However, if it is within the law, I WILL manipulate my circumstances to minimise my tax. And I'm too selfish to care about the common good. I do not get a warm feeling when paying taxes because I'm contributing to the common good: for me it's a necessary evil and the only reason I'm paying it is because I haven't found a legal way to NOT pay it.
    Alex
     
  17. feihong

    feihong Member

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    minimising tax commitment and doing your bit for the common good are not necessarily mutally exclusive? Kerry Packer once said, "Everyone else is paying too much tax" or somewhere along the line when questioned about his $1 tax (I vaguely recall). Yet, he has donated quite a bit anonymously.
     
  18. Mr. Fabulous

    Mr. Fabulous Thought Criminal

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    Hi asdf,

    I like your idea, but do you really think the ATO is stupid enough to fall for it? There are lots of things you would need to do in such a situation, such as one person charging the other rent and having to declare that income and subsequently losing the CGT exemption on 50% of the gain.

    It's just like strategies to win at the casino - if you think it can be done, they've already thought of it long before you did and have gotten around the issue.

    Mark
     
  19. Mr. Fabulous

    Mr. Fabulous Thought Criminal

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    He doesn't donate anything anymore!

    Mark
     
  20. Mr. Fabulous

    Mr. Fabulous Thought Criminal

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    I don't understand this mentally some people have that you should pay your taxes based on some moral obligation that it's somehow the 'right' thing to do.

    Let people pay tax if they want - I'm going to claw back every single dollar I possibly can legally. If you're so concerned about helping people, then get all your tax back and donate some/all of it. That way you get to choose where the money goes, not some moron with their head up their bum in our nation's capital.

    Most of it goes into pollie's or pollies' mates pockets anyway.

    Mark