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From: Anonymous
Hi,
I am another newbie looking for advice, amongst what I can see is a tonne of seasoned professionals.
We purchased our current terraced home in May 95 and had it gutted and rebuilt between July 98 and April 99. The original intention was to sell the property upon completion (or within 6 months of completion). Unfortunately, due to spiralling costs, compliments of the Olympics and an uncaring builder, the cost of rebuilding has blown the original profit expectations. The house is situated very close to the CBD, in a medium to high growth area. It would seem to make sense to continue to live in the property, especially as it is now very comfortable and spacious, until the value has caught up with our original profit expectations. However, while we wait, we will not receive any tax benefits (and we definitely need them) and the large amount of depreciation deductions on this property will be wasted. I have toyed with the idea of renting out the property, while we rent someplace else, but it would be hard to find a rental property around this area which is affordable and we could also end up with the Tenants from Hell. I see the way round this dilemma, would be to find some way to declare our current home as an IP, pay a market rent, but be able to claim the tax benefits. If we get the tax benefits on this property, we will be able to afford to risk buying an IP, whereas at the moment we have an 80% mortgage which is just about manageable.
Any suggestions as to whether/how this can be done legally?
Thanks in advance.
FCB
Hi,
I am another newbie looking for advice, amongst what I can see is a tonne of seasoned professionals.
We purchased our current terraced home in May 95 and had it gutted and rebuilt between July 98 and April 99. The original intention was to sell the property upon completion (or within 6 months of completion). Unfortunately, due to spiralling costs, compliments of the Olympics and an uncaring builder, the cost of rebuilding has blown the original profit expectations. The house is situated very close to the CBD, in a medium to high growth area. It would seem to make sense to continue to live in the property, especially as it is now very comfortable and spacious, until the value has caught up with our original profit expectations. However, while we wait, we will not receive any tax benefits (and we definitely need them) and the large amount of depreciation deductions on this property will be wasted. I have toyed with the idea of renting out the property, while we rent someplace else, but it would be hard to find a rental property around this area which is affordable and we could also end up with the Tenants from Hell. I see the way round this dilemma, would be to find some way to declare our current home as an IP, pay a market rent, but be able to claim the tax benefits. If we get the tax benefits on this property, we will be able to afford to risk buying an IP, whereas at the moment we have an 80% mortgage which is just about manageable.
Any suggestions as to whether/how this can be done legally?
Thanks in advance.
FCB
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