Ppor + Fhog + Ip - Cgt = Ok?

[Chowgz]

I know this has probably been answered somewhere in this forum.. but I've meandered around here for the last couple hours and not come across it.

Pretty straight forward..

If I buy a place, move into it, claim FHOG, move out and rent it out (property remains PPOR) then sell it within six years...

Can I claim exemption from CGT AND claim tax benefits during the rental period?

Cheers.

 

[DaleGG]

Hi

Yes, you can providing that you have no other PPOR during that time when the property is rented.

Cheers

Dale

I know this has probably been answered somewhere in this forum.. but I've meandered around here for the last couple hours and not come across it.

Pretty straight forward..

If I buy a place, move into it, claim FHOG, move out and rent it out (property remains PPOR) then sell it within six years...

Can I claim exemption from CGT AND claim tax benefits during the rental period?

Cheers.

 

[alpina]

Hi
Yes, you can providing that you have no other PPOR during that time when the property is rented.
Cheers
Dale

how is that possible? even if you were to choose to rent out your ppor and then go off to rent a place for yourself, wouldn't that place then become your PPOR?

regards,

julie

 

[mckennal]

how is that possible? even if you were to choose to rent out your ppor and then go off to rent a place for yourself, wouldn't that place then become your PPOR?

AFAIK because you don't own the place you move into, you can nominate your owned (and now rented out) house as your PPOR for a period of up to 6 years.

Beware though, at least in WA, the office of state revenue will regard your newly moved into rental place as your 'PPOR' for land-tax purposes. So that means the house you bought will have land-tax payable. That is what I was told by the OSR anyway.

Luke
Perth

 

[DaleGG]

Hi Julie

Luke is right. The home that you rent is not your PPOR for tax purposes because you do not own it.

Cheers

Dale

 

[alpina]

Thanks Luke and Dale.

So it is possible to rent out your ppor and get the full tax benefits and at the same time buy a property under a trust, rent it and get the benefits again on the property under trust? and assuming you then move back into your ppor within 6 years there are no penalties on your ppor? of course the rented property will be subject to cgt to land tax.

is this correct?

thanks,

julie

 

[Chowgz]

Cheers Dale/Luke,

That sounds about right Luke.. I had a look at the WA OSR web page and the house has to be "your regular and usual place of residence" which I assume is different to your PPOR.

In the scenario I mentioned above where the PPOR is rented out, would this land tax also be considered a tax deductable expense along with the interest for the loan, depreciation etc?

Cheers,

Another Luke
Also in Perth

 

[mckennal]

In the scenario I mentioned above where the PPOR is rented out, would this land tax also be considered a tax deductable expense along with the interest for the loan, depreciation etc?

I see no reason why not. It is a cost associated with operating the rental property.

...buy a property under a trust, rent it...

I think this part is debatible as to whether it is legal or not. If the only reason you are buying the house you are going to live in using a trust is to be able to claim tax deductions, then I think the ATO might have a problem.

Luke
PS: I am no accountant, so all my opinions should not be taken as gospel, seek advice of an accountant or similar for clarification.

 

[alpina]

I think this part is debatible as to whether it is legal or not. If the only reason you are buying the house you are going to live in using a trust is to be able to claim tax deductions, then I think the ATO might have a problem.

Hi mckennal,

that would not be the only reason and would be more of a by product

more interested in the asset protection and the fact that i would eventually want to rent it out.

regards,

julie

 

[Chowgz]

Non-resident claiming FHOG..

A couple of months after my original post, I left Australia to work abroad as an expat. I never claimed FHOG but did purchas an IP back in Perth.

I am still overseas as a "non-resident Australian citizen" and am now looking into the possibility of purchasing my second place. I know this is probably dodgy as hell, but I am going to pose the question regardless..

If I buy a property as a non-resident, can I declare it as my PPOR, claim FHOG, never physically move into it, later "decide" to rent it out, and then not pay CGT on the first six years?

 

[Mry]

If I buy a property as a non-resident, can I declare it as my PPOR, claim FHOG, never physically move into it, later "decide" to rent it out, and then not pay CGT on the first six years?

No. You have to live in it to begin with. You can't claim a PPOR exemption if it was never resided in at all.