Buying each other's 'PPOR'

[No Probs]

Edit: moved to tax/legal section of forum

 

[moyjos]

I have a friend who did this with his brother. Not PPOR's though, they did it with marina berths for their yachts . Each bought a berth and rented it to the other.

Never heard they was any problem with it.

 

[vaughan]

... The idea is that we both buy each other's preferred property and then rent them to each other, therefore making all costs of the properties tax deductible and helping with future borrowing serviceability.

You both lose the PPoR CGT exemption. You also run the risk that if the other person either decides to sell or needs to, then you're out of a house.

Equity can easily be drawn out of a PPoR.

I'd imagine that such has been done before, numerous times, and the ATO already has an opinion on it. They may view it as a scheme to avoid paying tax.

 

[redwing]

Noel WHITTAKER also talked about the option of two people buying houses of comparable values and renting to each other

 

[bashworth]

When we first moved to Australia there were 2 neighbours in our street who owned each others house.

I remember it seemed very weird to me coming from a country where you got tax relief on your PPOR but not investment properties.