tax on PPOR when renting out rooms
- Thread starter Pat82
- Start date
Yes but you will also pay capital gains tax when you sell.
Can't have your cake and eat it too.
Don't sell.
Use the equity to fund other income producing assets, and continue to build both the wealth base and the income streams.
I think you could claim 2/3 of interest expenses and other expenses like rates and water rates. However you have to pay tax on the income (so unless majorily negative geared net tax effect will be close to zero) and rent will hav e to be at market value.
Also loose CGT exemption, which maybe valuable. Will also have to live with two other people which may cause headaches.
Also loose CGT exemption, which maybe valuable. Will also have to live with two other people which may cause headaches.
If you are not renting the rooms at market rate then you may have a problem.
However in my experience as an accountant the really dogegy people seem to get away with murder with the ATO. It's only the semi dodgy people who get screwed by the ATO.
However in my experience as an accountant the really dogegy people seem to get away with murder with the ATO. It's only the semi dodgy people who get screwed by the ATO.
Hi PP,
My loan size is 720k and market rate per room is about $160 pw. The 2 rooms will be rented out to students so it will only be tenanted 40 weeks per year. As you can see, it will be negatively geared by roughly 15k per year (assuming interest is 5.6%). From your experience, is this dodgy enough?
-Patrick
My loan size is 720k and market rate per room is about $160 pw. The 2 rooms will be rented out to students so it will only be tenanted 40 weeks per year. As you can see, it will be negatively geared by roughly 15k per year (assuming interest is 5.6%). From your experience, is this dodgy enough?
-Patrick
You should be able to claim 2/3 of interest and expenses but think it out first, how much extra will you lost in CGT. You may save a thousand only be by hit with 10s of thousands later.
If you do claim 2/3s look at your furniture too. If you provide this you could possibly claim depreciation on 2/3 of the TVs, Fridges, knives and forks. Toilet paper could even be deductible.
If you do claim 2/3s look at your furniture too. If you provide this you could possibly claim depreciation on 2/3 of the TVs, Fridges, knives and forks. Toilet paper could even be deductible.
