first home buyer but renting 2 rooms out
- Thread starter tyrone
- Start date
In NSW yes, or at least under the grant for existing homes, which was what I got when I bought. I don't know about now, since they have abolished the grant for existing homes. ie if you bought a new property with the new grant rules, I wouldn't know the answer.
In QLD the answer also was no, at the time I bought.
I have never had any information about WA, you need to check the laws over there.
In QLD the answer also was no, at the time I bought.
I have never had any information about WA, you need to check the laws over there.
Allowed? You would have to check the FHOG Act, but I think the requirement is that you live there and it is silent on if you can rent out the rooms.
You will also need to consider the CGT effect this has - your home will no longer be CGT free.
Terry W is correct.
Even renting out a 'portion' of your house (even if that is one bedroom of say, a 6 bedroom mansion!), your property becomes an investment property and CGT will be payable upon sale; apportioned to the years of it being rented out.
That said, during the years that it is rented out, you are actually positioned quite well, tax-wise (Depending on your income level). I say this because the way house/apartment sharing works when the owner also occupies it is this: the usage of the property as an investment property is claimable only in proportion of common areas used. This means, for example, a 2-bedroom unit where you live in one and someone lives in the other, means that both people use the non-bedroom 'spaces' of the unit 50/50, so you can claim up to only 50% of the entitlement of expenses such as strata, water rates, interest on mortgages etc.
Where this arrangement gets better, though, is in larger properties. I'd need to double-check this (so peers - please don't pull me apart on this if I've presented this incorrectly) and would preface this by strongly suggesting you contact the ATO to uncover the full detail here... but;
Say you have a 6-bedroom house which you own and live in one bedroom, and you rent the other 5 bedrooms out, you would be entitled to claim up to 80% of the claimable amounts for things mentioned above.
Even renting out a 'portion' of your house (even if that is one bedroom of say, a 6 bedroom mansion!), your property becomes an investment property and CGT will be payable upon sale; apportioned to the years of it being rented out.
That said, during the years that it is rented out, you are actually positioned quite well, tax-wise (Depending on your income level). I say this because the way house/apartment sharing works when the owner also occupies it is this: the usage of the property as an investment property is claimable only in proportion of common areas used. This means, for example, a 2-bedroom unit where you live in one and someone lives in the other, means that both people use the non-bedroom 'spaces' of the unit 50/50, so you can claim up to only 50% of the entitlement of expenses such as strata, water rates, interest on mortgages etc.
Where this arrangement gets better, though, is in larger properties. I'd need to double-check this (so peers - please don't pull me apart on this if I've presented this incorrectly) and would preface this by strongly suggesting you contact the ATO to uncover the full detail here... but;
Say you have a 6-bedroom house which you own and live in one bedroom, and you rent the other 5 bedrooms out, you would be entitled to claim up to 80% of the claimable amounts for things mentioned above.
