We are planning to demolish our PPOR and rebuild on the block. While the work is going on, we will need somewhere else to live. Rather than renting, one option is to move in to an IP that we have close by. We have owned the IP for about 3 years and we are thinking about cashing in on the recent market increase in Perth and selling the IP in about a years time. One of the reasons for moving in would be to reduce the CGT when we sell - if we live there for a year, we would save about 25% of the CGT liability by nominating the IP as our PPOR for that year. A downside to moving in to the IP would be that we would lose our negative gearing benefits on the IP while it was our PPOR, i.e. mortgage interest would be non deductible .
That sets the scene. My question is - can we pre-pay a year's worth of interest while the property is still rented out and claim the tax deduction on this interest? We would then end up paying no interest while living in the house as our PPOR.
If there is no clear cut answer, maybe someone could suggest a savvy accountant in Perth - my current one is useless.
That sets the scene. My question is - can we pre-pay a year's worth of interest while the property is still rented out and claim the tax deduction on this interest? We would then end up paying no interest while living in the house as our PPOR.
If there is no clear cut answer, maybe someone could suggest a savvy accountant in Perth - my current one is useless.