Raising a home and renting unit underneath?

Hi Guys,

I have recently raised and renovated a postwar home in Camp Hill in Brisbane. Below the home I developed a large two bedroom unit with kitchen, bathroom, and two parking places.

I would love hear peoples opinions on how to lease the property. I am considering doing short term accommodation as my accountant believes that your own home loan for you PPOR becomes tax deductible. I have also considered student accommodation or standard long term leasing.

Any feedback or experiences will be appreciated.
 
I would love hear peoples opinions on how to lease the property.
Hire a Property Manager who will advertise it, do tenant screening and selection, draw up a lease and pay into your bank account monthly. Or do all the preceding yourself - i.e. self manage.

....... my accountant believes that your own home loan for you PPOR becomes tax deductible.
NO, I don't think your accountant does think that at all :p. What becomes tax deductible is that portion of your mortgage which can be attributed to the unit you've created calculated on a per square metre basis. e.g. If you have a $300K mortgage and the house you live in upstairs is 20m2 say and the unit downstairs is 10m2 then you can claim the interest on $100K as an expense to be offset against the rent you receive from the downstairs unit.

In addition, you will lose the CGT free status of your PPOR since you are deriving an income from it.

I have also considered student accommodation or standard long term leasing.
That's your call. There are positives & negatives for each scenario.
 
Hi Guys,

as my accountant believes that your own home loan for you PPOR becomes tax deductible..
If your accountant believes that, I would promptly be finding a new accountant.

What becomes tax deductible is that portion of your mortgage which can be attributed to the unit you've created calculated on a per square metre basis. e.g. If you have a $300K mortgage and the house you live in upstairs is 20m2 say and the unit downstairs is 10m2 then you can claim the interest on $100K as an expense to be offset against the rent you receive from the downstairs unit.

In addition, you will lose the CGT free status of your PPOR since you are deriving an income from it.

While I am not an accountant, I believe that Propertunity is correct.:D
 
If your accountant believes that, I would promptly be finding a new accountant.



While I am not an accountant, I believe that Propertunity is correct.:D

I agree with this. What propertunity says ties in with everything I have ever heard.

It is the same as if you work from home .. you can deduct expenses .. rent. power, interest etc in proportion to the percent of floor area used for work purposes, the rst you opayout of your tax paid income.

cheers

RightValue
 
Good move on reno
consider renters as borders. The tax man won't help you out ,BUT you won't have to pay tax on boarder.{Don't take my word on it though, make sure you check} ,nor will you have to pay CGT etc. Make sure you charge extra for electricity and water.
remember to KISS rule
 
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