Rent assistance, my renter and me

I

Invest

Hi all,

Just a continuation from another rental tax thread, I have a situation which just came up.

My GF lives with me and she just quit her full time work to start full time study. She has applied for Centrelink study allowance and also wants to claim rent assistence! She has put my name and address down on the letter and will send Centrelink saying I am her landlord and she rents a room at my house which I bought.

Now whats going to happen to me and my tax?

Will I now have to pay capital gains tax on my property? Also how will this affect tax return for me?

I can only assume that ATO will work with Centrelink and because I am the nominated landlord they will now look at me differently.

I dont want to pay any capital gains tax or let it affect my tax return... for 100 bucks a week in rent this is just not worth it IMO.

Any help?
 
I spoke with Ato and they said that the rental itself will not have much of an impact on my tax return but I would have to pay capital gains tax if I ever sold the property.

is this right?
 
Invest said:
Now whats going to happen to me and my tax?
Click to expand...
You are going to have her rent as taxable income :mad:
But you also get to claim expenses on the floor m2 basis that you rent to her.

Invest said:
Will I now have to pay capital gains tax on my property?
Click to expand...
Only if you do 2 things:
1. Ever sell
2. Make a capital gain
CGT will be calculated on the floor m2 area you are renting to her.

Invest said:
Also how will this affect tax return for me?
Click to expand...
You'll need to include your rental income from her and your expenses for same. It could be a + or - depending on you IR and mortgage etc

Invest said:
I dont want to pay any capital gains tax or let it affect my tax return... for 100 bucks a week in rent this is just not worth it IMO.
Click to expand...
I agree - probably not worth it. See this thread:
http://www.somersoft.com/forums/showthread.php?t=49165
 
If you have become a "landlord" to your girlfriend, the ATO will treat you like any other landlord earning money from a property. As they should!! The rest of us pay taxes, while you want to dip in for rent assistance.
You rent money will need to be included as part of your income in the tax return.
Also, you will be subject to capital gains tax on the portion of property you are renting out. Best to get a valuation to establish a cost base for your home.

"So if you rent out part of your home, for example a granny flat or rooms in the house, the six-year rule cannot apply (ie, on capital gains tax excemption). Instead your main residence exemption is limited to the part of the property you use personally.

If this is the first time you’ve earned income from your home, it will cause your cost base for your whole home to be reset at the market value at the date it first started earning income. This can be the case even if you are just renting out a room in your home. "
 
Ok I think this is not a great idea.

i may just ask her to rent at a "friends" place and declare rental assistence from Centrelink using a rental place... not someone's PPOR. :)
 
Lamingtons said:
Or she could just tell the truth and NOT be claiming stuff that she shouldn't be claiming.
Seriously
Click to expand...

Not worth it... too many payments.. a complicated situation.

I know heaps of people who claimed rental assistence while living in POOR with their parents but declaring as if they lived elsewhere.

If you can get away with it... why the phuck not? Seriously.
 
I recently had this discussion with my neice who was going to have her boyfriend move in and also pay rent.

I would not so much be worried about charging her rent and ATO with CGT.

My biggest concern for her and the most important thing that I believe that you should be considering is that after living with you for 6months with or without paying rent she can be considered your "defacto" and should she decided to leave or you decided for her to leave - she could with have of the equity in your house.

Something to consider.
 
Because it is a criminal offense. Centrelink fraud is committed when a person knowingly gives false and misleading information to obtain access to a benefit(s) and to obtain a payment(s) that they should not be getting or misrepresents their circumstances or fails to inform Centrelink that they have no further entitlement to benefits.

The taxpayer (you and I) contribute to the needy through our taxes. Anything outside the rules established by the law is an offense and those who committ such fraud deserve the punishment that is possible under the law.

My legal associates are informing me of more and more Centrelink frauds being exposed and those individuals facing severe penalties. The data matching tools available are now widespread and there is a concerted effort between the ATO and Centrelink. Those found guilty are not being treated lightly. And nor should they.
 
Also currently my GF has her bank account and other letters (not utilities) send to my address. Can ATO use that against me to say that she "lives" with me based on that evidence? Or is it just a mailing address, as far as I know you can have a normal address where you live, but a different mailing address.
 
coastymike said:
Because it is a criminal offense. Centrelink fraud is committed when a person knowingly gives false and misleading information to obtain access to a benefit(s) and to obtain a payment(s) that they should not be getting or misrepresents their circumstances or fails to inform Centrelink that they have no further entitlement to benefits.

The taxpayer (you and I) contribute to the needy through our taxes. Anything outside the rules established by the law is an offense and those who committ such fraud deserve the punishment that is possible under the law.

My legal associates are informing me of more and more Centrelink frauds being exposed and those individuals facing severe penalties. The data matching tools available are now widespread and there is a concerted effort between the ATO and Centrelink. Those found guilty are not being treated lightly. And nor should they.
Click to expand...

Who says I am commiting fraud?

100 week rent is mainly costs associated with running the house hold (food, bills etc)

She is declaring that she is paying 100 rental... big woopty doo.

People that rip the system off are the likes of Skases... they grab millions too then come back out country and purchase million dollar homes in Toorak (Pixie)... so please dont tell me this rubbish... i dont care if Joe Blow down the street gets 100 bucks a week from rental that he doesnt declare.
 
Sorry mate, I agree with coasty mike, whether its .1c or $1,000,000,000 what you propose is theft and fraud.

If there is a definite legal loophole that allows it well thats a different matter.

I wonder if the ATO follow some of these threads

Dave
 
...in another thread you are trying to seek out ways to not pay tax on paypal income. Here you want her to claim the r.a. but don't want this to affect you with cgt if you sell or want her to get her share of your things if termed defacto. You are the one giving us the info. If you don't want the forums advice you don't need to ask for it. :)
 
Fair enough. Ok to put a lot of people's minds at rest, I think it will be better if she rents elsewhere and not with me while seeking rental assistence from Centrelink. She can rent with people who are also renting... problem solved.
 
fokas said:
To not be a conforming leech perhaps? I think it's got something to do with morals and ethics...
Click to expand...

The politicians in our country get away with more... dont worry. RBA's retarded decision making on IR literally will cost me many thousands of dollars because they cant make up their mind whether to raise or lower interest rates... paying 500 a week on a 285 K mortgage is bullsh|t at todays interest rates.

Anyway thanks for the comments, threads closed.
 
Hey Invest, no one forced you to fix your loan at around 8%. If you had fixed lower, and the rates went up, you wouldn't be complaining then. What if the banks wanted to break your contract then and raise the fixed IR's.
You gambled. You lost.

Think they call it Karma!!. Your trying to find any way to rort the system, and end up paying more, hahah!

We're looking forward to fixing in a few months time for 5yrs at maybe 4.5%, :))).
 
investor888 said:
Hey Invest, no one forced you to fix your loan at around 8%. If you had fixed lower, and the rates went up, you wouldn't be complaining then. What if the banks wanted to break your contract then and raise the fixed IR's.
You gambled. You lost.

Think they call it Karma!!. Your trying to find any way to rort the system, and end up paying more, hahah!

We're looking forward to fixing in a few months time for 5yrs at maybe 4.5%, :))).
Click to expand...

Almost said the same thing 888

I sometimes wonder if I missed the the sign that said "Tax Avoiders and Welfare Cheats Particularly Welcome" when I joined this forum.:(

Perhaps an unhealthy infatuation with negative gearing is some sort of gateway behaviour to tax and welfare fraud?

Must create a poll one day.
 
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