PPoR to IP what should I remember to do

[Ruckmauler]

Hi - I'm converting my PPoR to an IP. I am worried I might forget something.

What I have so far to do is:

To ensure I don't lose the primary residence capital gains tax concession, I need to move to my new home before my old PPoR becomes an IP (and to do it as quick as practical)

To reset the cost-base, I need to go get a valuation done (or more than one) and take that as the cost base?

I need to get a depreciation schedule drawn-up (perhaps go with the Depreciator)

I need to interview some property managers and pick one (sounds like 8% is the normal fee for inner Sydney).

Can you see any glaring omission?

 

[Terry_w]

It would be a bit hard to lease your house out while still living there!

If it will remain your main residence then no valuation would be needed.

Just move out, and start claiming expenses from the date it is rented or available for rent. Get a depreciation schedule done too.

 

[BMan]

get a valuation done before you start leasing it out.
then if it has gone up in value you dont lose some of those gains to CGT.
if it has gone down its up to you if you use the valuation or just go by the price you paid.
also if your moving and renting a place you can still claim it as your ppor for up to 6 yrs then get a valuation done. but if you have bought a new PPOR then you are unable to do this

 

[coastymike]

Bman

Can still be done even if you have another ppor. However that ppor will then be subject to cgt for the period where you elect for another property not that one to be your main residence. Might not be a major issue though given all the third element costs that will increase the cost base.

 

[Ruckmauler]

Thanks everyone - it's good to know I am on the right track.

 

[r3ckless]

I am going to be in the same boat soon in 6 months time. I will be moving out, and renting out the property. Just to clarify, the loan/loan purpose is for owner occupied purposes. Do I have to do anything to the homeloan/let the Bank know such that it can be claimed as an investment. I remember reading on here that for the interest to be tax deductible, it is all about the loan purpose - well the loan purpose is to provide me finance to get a PPoR property. How do I change the loan purpose with the Bank?

 

[Terry_w]

I am going to be in the same boat soon in 6 months time. I will be moving out, and renting out the property. Just to clarify, the loan/loan purpose is for owner occupied purposes. Do I have to do anything to the homeloan/let the Bank know such that it can be claimed as an investment. I remember reading on here that for the interest to be tax deductible, it is all about the loan purpose - well the loan purpose is to provide me finance to get a PPoR property. How do I change the loan purpose with the Bank?

The purpose of the loan was to purchase a property. Telling the bank it is an investment has no bearing on your ability to claim interest. The interest will be deductible if and when the property becomes income producing and the loan related to the purchase or expenses of that property.

 

[r3ckless]

The purpose of the loan was to purchase a property. Telling the bank it is an investment has no bearing on your ability to claim interest. The interest will be deductible if and when the property becomes income producing and the loan related to the purchase or expenses of that property.

That has perfectly explained it to me. Thabks terry. I took it.too far andassumed the loan purpose was owner occupied. As owner occupied/investment. I still have purchased the prioertyy.. so it is tax deductible. Cheets