Hi folks,
I've been lurking for years, and only randomly had to post as generally a few minutes searching answers any questions I've had.
In preparation with a meeting with my accountant I do now have some questions relating to a potential PPOR purchase that has a separate granny flat. I know that as soon as I rent out the granny flat that I lose a % of CGT exempt status however in the earlier years I need the extra income to be able to afford the type of property we want (up to 5 acres). Indicative figures are $1.0m total purchase, 250k deposit, possible granny flat rent ~300 a week.
My questions are:-
1. What methods can be used to apportion the correct expenses towards the granny flat? Say half the land is rented with the granny flat, how do you determine how much is tax deductible expenses. I'd obtain a depreciation schedule for the GF so the question mainly relates to loan and rates. ATO site suggests floor space when it's a single residence, however can't find guidance when there are 2 + land.
2. Is it possible to ensure all the deposit goes towards reducing the non deductible component of the debt?Would this need a split loan or other special considerations to keep it clean for tax?
3. Once we reach the point that we no longer need the extra income and stop renting the granny flat out does all the property revert to be CGT exempt from this point on? If not is there a way it could be?
4. My last question may be better suited to the Property Finance section however will post it here first. Would the lenders treat all the debt as needing to be serviced without rent, or would they make allowances for renting the granny flat (similar to say assessing me for a 300k investment loan, and 450k PPOR loan).
Any thoughts or comments appreciated. Cheers.
I've been lurking for years, and only randomly had to post as generally a few minutes searching answers any questions I've had.
In preparation with a meeting with my accountant I do now have some questions relating to a potential PPOR purchase that has a separate granny flat. I know that as soon as I rent out the granny flat that I lose a % of CGT exempt status however in the earlier years I need the extra income to be able to afford the type of property we want (up to 5 acres). Indicative figures are $1.0m total purchase, 250k deposit, possible granny flat rent ~300 a week.
My questions are:-
1. What methods can be used to apportion the correct expenses towards the granny flat? Say half the land is rented with the granny flat, how do you determine how much is tax deductible expenses. I'd obtain a depreciation schedule for the GF so the question mainly relates to loan and rates. ATO site suggests floor space when it's a single residence, however can't find guidance when there are 2 + land.
2. Is it possible to ensure all the deposit goes towards reducing the non deductible component of the debt?Would this need a split loan or other special considerations to keep it clean for tax?
3. Once we reach the point that we no longer need the extra income and stop renting the granny flat out does all the property revert to be CGT exempt from this point on? If not is there a way it could be?
4. My last question may be better suited to the Property Finance section however will post it here first. Would the lenders treat all the debt as needing to be serviced without rent, or would they make allowances for renting the granny flat (similar to say assessing me for a 300k investment loan, and 450k PPOR loan).
Any thoughts or comments appreciated. Cheers.