Can half a house be an PPOR and the other half an IP?

[scott]

Can half a house be an PPOR and the other half an IP?

Situation is that two work collegues bought a town house 50% each and both lived there together.

They have had a falling out and one has moved out.

Can the one who has moved out now rent her half back to the one who stays and treat it as a IP with corresponding tax advantages etc?

Scott

 

[Monopoly]

Quite simply Scott....YES.

Basically, anyone can turn any part of their PPOR into a revenue generator, be it by having a home-office (business) or just taking on a boarder. As long as you are renting or using any part of the house to generate an income, when (and if) you ever decide to sell the property CGT will be apportioned accordingly, taking into account the length of time and percentage of the home utilised for this purpose. Similarily, any tax deductions will be applicable and apportioned to (in your case 50%) of the property used as an IP.

Hope this helps.

Cheers,

Jo

 

[scott]

Thanks Monopoly

With the market flat, CGT may not be a real concern for them at present.

Scott