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From: Mike .


first home how long
From: JPT
Date: 27 Feb 2001
Time: 22:00:11

Hi all. please help. Wondering how long do you have to occupy a property (nominated as a 1st home) before you can rent it out? I understand that you have to occupy it in 1 years time but is it possible to occupy it as a principal place of residence for only 6 months before renting it out..?

I have rung the OSR people and they have said only the Claims audit dept has that answer and they don't have a help line on that. The help desk people said that the legislation does not state how long it must be occupied as a home either, only that you intended to use it as a principle residence.

Does that mean when they audit they will allow such circumstance changes which would make the home become nominated as an IP? Can you claim the depreciation of fittings prorata after it has been converted into a rental property..?

Many thanks

 

[WebBoard]

Alston

Reply: 1
From: Mike .


Re: first home how long
From: Alston
Date: 28 Feb 2001
Time: 06:14:34

My understanding is that it really comes down to your intention. If you can show that it was your intention to occupy the house long term, then I think you are OK, no matter how long the period.

How do you demonstrate what your intention was? I don't know. However, one way is if the reason for you moving out was unknown at the time of purchase. For example, if you job has forced you to move, then I think this would cover it.

Perhaps your solicitor can help. One idea that may work is if you can get your solicitor to sent you a letter during the transaction asking what your intention is? He would then have your response on file and this could be used latter if required.

In short, I don't think this is clear cut. Talk to your solicitor and accountant.

Alston

 

[WebBoard]

Owen

Reply: 1.1
From: Mike .


Re: first home how long
From: Owen
Date: 28 Feb 2001
Time: 11:30:17

See "Re: Tax Questions Owen 22 Feb 2001" for links to the ATO Rental Handbook (again) or use you favorite web search engine. It's amazing what you can find.

Showing intention to move in by placing furniture in the property and hooking up utilities in you name is enough to qualify the property as your Primary Place of Residence. Then you can rent it out. I doubt you could retroactively claim any tax deductions if you live in the place for 6 months though.

Chi-ching - $1 please Les.