Hi there,
I think the CGT-free status of the PPOR, along with the 6 year CGT-free rule, make the PPOR a great ''investment'' and a great store-house of people's wealth.
So what are your thoughts on this basic strategy:
Buy PPOR
Live in it for 6 months
Then move out
Rent out former PPOR, so loan is fully deductible
Rent a modest place to live in, OR, live in one of your existing investment properties where the loan (hence, non-deductible debt) is smaller/negligible and/or can be paid out very quickly
After 4-6 years (depending on where we are in the market cycle), sell the initial PPOR (your "nominated'' PPOR) CGT-free (no additional LOCs to be created against this property)
Then buy a new PPOR (bigger and better) using the sale proceeds from this property and another modest loan
Move into this property for 6 months
Then move out
Rent out for former PPOR, so loan is fully deductible (and potentially neutrally geared/CF +ve or low negative geared due to a lower LVR)
Move back into a modest rental property or the previous investment property with low or nil non-deductible debt
After 4-6 year (depending on where we are in the market cycle, sell 2nd nominated PPOR CGT-free again
Repeat the same process ad infinitum, each time buying a bigger and better PPOR.
When closer to retirement, sell the massive PPOR you now have CGT-free, to invest in income producing assets.
This strategy would require you to buy, sell and upgrade your nominated PPOR at regular 4-6 yearly intervals (and each time you would move into the PPOR and then move out again after 6 months), whilst maintaining a relatively more modest lifestyle in terms of where you actually lived, and require you to move houses twice every 4-6 years, so not for everyone...
But interested in your thoughts...
It wouldn't of course preclude you from buying other residential investment properties, CIPs, shares, businesses etc. at the same time.
Thanks.
I think the CGT-free status of the PPOR, along with the 6 year CGT-free rule, make the PPOR a great ''investment'' and a great store-house of people's wealth.
So what are your thoughts on this basic strategy:
Buy PPOR
Live in it for 6 months
Then move out
Rent out former PPOR, so loan is fully deductible
Rent a modest place to live in, OR, live in one of your existing investment properties where the loan (hence, non-deductible debt) is smaller/negligible and/or can be paid out very quickly
After 4-6 years (depending on where we are in the market cycle), sell the initial PPOR (your "nominated'' PPOR) CGT-free (no additional LOCs to be created against this property)
Then buy a new PPOR (bigger and better) using the sale proceeds from this property and another modest loan
Move into this property for 6 months
Then move out
Rent out for former PPOR, so loan is fully deductible (and potentially neutrally geared/CF +ve or low negative geared due to a lower LVR)
Move back into a modest rental property or the previous investment property with low or nil non-deductible debt
After 4-6 year (depending on where we are in the market cycle, sell 2nd nominated PPOR CGT-free again
Repeat the same process ad infinitum, each time buying a bigger and better PPOR.
When closer to retirement, sell the massive PPOR you now have CGT-free, to invest in income producing assets.
This strategy would require you to buy, sell and upgrade your nominated PPOR at regular 4-6 yearly intervals (and each time you would move into the PPOR and then move out again after 6 months), whilst maintaining a relatively more modest lifestyle in terms of where you actually lived, and require you to move houses twice every 4-6 years, so not for everyone...
But interested in your thoughts...
It wouldn't of course preclude you from buying other residential investment properties, CIPs, shares, businesses etc. at the same time.
Thanks.
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