Moving into IP and becomes PPOR

[RayRay]

Hi Forum

Just recently had some minor renos on our 3Bdr IP done.

We currently live with in-laws granny flat/shed. Tight squeeze with 2 kids and wife. Anyway, with reno done, wife and kids want to move in there cos more room, obviously, and like the new look of the IP.

We have rented the IP since 2009. We also have vacant block of land (2011) which I am hoping to build however with IP now may become our PPOR this may limit extra $$ to fund this build.

what are the pros/cons of moving into IP, and it becoming the PPOR from tax perspective and renewd investment strategies in this move.

Appreciate any advice.

 

[The Y-man]

Not much tax implication other than you can't claim interest on PPOR,
Just in case it becomes and IP again in the future, DO NOT pay off any of the principal. Keep money in an offset.

The Y-man

 

[RayRay]

Not much tax implication other than you can't claim interest on PPOR,
Just in case it becomes and IP again in the future, DO NOT pay off any of the principal. Keep money in an offset.

The Y-man

Thanks Y-man. I will remember that.

Another question. Though still an IP, by moving in, will I lose the tax deductible benefits of the renos I've already put into the place, so I can claim next tax year. Is the place legally still an IP when not rented out as its not producing any income (rent)? or it loses its IP status the moment we move in.

 

[Terry_w]

Thanks Y-man. I will remember that.

Another question. Though still an IP, by moving in, will I lose the tax deductible benefits of the renos I've already put into the place, so I can claim next tax year. Is the place legally still an IP when not rented out as its not producing any income (rent)? or it loses its IP status the moment we move in.

no you cannot claim reno costs. Normally most costs would be depreciated anyway. And once it is not rented nor available for rent you won't be able to claim any costs.

IP will always be subject to CGT, but on a percentage time rented out basis.

Vacant land cannot be a main residence so subject to CGT. If you had intended to build to live in then no deductions. If you do build a house and then live in it you may be able to avoid CGT if this is done withine 4 years.

Many strategies available to reduce income and CGT so best to get some advice now.