We will be approaching our accountant but in the meantime, I would welcome any comments on two questions from the clever folks at Somersoft.com....
We have our PPOR just about market-ready as we wish to down-size from acreage. After we sell, we will find a house to rent and will no longer own a PPOR until we move to WA and retire in a few years.
(1) We have several investment properties. Are we able to nominate one of those investment properties as a PPOR even though we have never lived in it? The property is leased and we show the income and claim expenses in our tax return.
(2) We own a duplex block and plan to build soon. If we use the cash from the sale of our house to build the duplex, and then later on decide to buy a PPOR by withdrawing the equity from the duplex, is the interest deductible? (we think not.)
We're only a couple of years off retirement and have probably reached our borrowing limit.
An alternative may be to keep the cash from the sale of our PPOR in the bank and borrow to build the duplex (which the bank would agree to with our cash as an offset to this), but it doesn't make much sense and we'd pay tax on the interest earned.
Or we could live in one of the duplexes, however I think to do so we'd need to strata title so we can claim expenses on the other half. We'd rather keep the whole duplex as two rentals as they will be cashflow positive (after taking into consideration the rent that we will pay elsewhere).
Any suggestions on the best way forward?
Many thanks
Shirley
We have our PPOR just about market-ready as we wish to down-size from acreage. After we sell, we will find a house to rent and will no longer own a PPOR until we move to WA and retire in a few years.
(1) We have several investment properties. Are we able to nominate one of those investment properties as a PPOR even though we have never lived in it? The property is leased and we show the income and claim expenses in our tax return.
(2) We own a duplex block and plan to build soon. If we use the cash from the sale of our house to build the duplex, and then later on decide to buy a PPOR by withdrawing the equity from the duplex, is the interest deductible? (we think not.)
We're only a couple of years off retirement and have probably reached our borrowing limit.
An alternative may be to keep the cash from the sale of our PPOR in the bank and borrow to build the duplex (which the bank would agree to with our cash as an offset to this), but it doesn't make much sense and we'd pay tax on the interest earned.
Or we could live in one of the duplexes, however I think to do so we'd need to strata title so we can claim expenses on the other half. We'd rather keep the whole duplex as two rentals as they will be cashflow positive (after taking into consideration the rent that we will pay elsewhere).
Any suggestions on the best way forward?
Many thanks
Shirley