I am moving into my first PPOR in about 2 months and intend to stay in it for 6months, possibly 12, but if interest rates go up much I will have to rent it out after 6mths - I will still be better off even if I have to pay back the $5K in stamp duty that I will be ineligible for if I do'nt stay in it for the full 12mths.
Anyway, my grandparents are in their 80's, with a multitude of health problems and have been on the waiting list for retirement village for some years - gradually moving up the list apparently (although I think the list keeps growing and they are not always true to 'working down the list' in order). A developer has approached them to buy their current home. This appeals to them as they are nervous about not being able to sell their home when the time comes. Developer has said that maybe they can rent back off him for a while.
Family is thinking that they may be better moving into my PPOR/Investment as it is very suitable for aged and is closer to their family, and the place they are trying to get into, so effectively getting them into their new local area now, as rent for both properties would probably be similar.
I don't mind them living with me for the time I am living there, and just paying costs etc, but my query relates to after that. If they still haven't got a unit, and its likely, I think I would feel like a real heel to rent it out to them at market rate - its close to $400 a week! Either way they will lose their pension cos the money from the house will be sitting there until the unit comes up, and if they are paying that sort of rent it will eat it up.
So, is there any way I can let them live there but still not disadvantage myself too much with regards to my plan for this to be an investment property within 6-12mths, if they haven't got a unit by then? Can I rent it cheap, but still claim deductions/depreiciation - how much cheaper could I do it for it to still be legitimate? Is it ok to rent below 'market value', who determines what is market value for tax purposes? If I stay living there with them after the 12mths, then I gather I can't claim anything on the investment side of things, even if they pay board of some kind? Don't get me wrong, I love my grandparents, but I don't want to jeopardise my financial future when there are other options (ie. stay where they are) - and there are a lot of other family members that are financially much better off than me that could take them in.
Sorry this post is so long! Thanks for your help...
Anyway, my grandparents are in their 80's, with a multitude of health problems and have been on the waiting list for retirement village for some years - gradually moving up the list apparently (although I think the list keeps growing and they are not always true to 'working down the list' in order). A developer has approached them to buy their current home. This appeals to them as they are nervous about not being able to sell their home when the time comes. Developer has said that maybe they can rent back off him for a while.
Family is thinking that they may be better moving into my PPOR/Investment as it is very suitable for aged and is closer to their family, and the place they are trying to get into, so effectively getting them into their new local area now, as rent for both properties would probably be similar.
I don't mind them living with me for the time I am living there, and just paying costs etc, but my query relates to after that. If they still haven't got a unit, and its likely, I think I would feel like a real heel to rent it out to them at market rate - its close to $400 a week! Either way they will lose their pension cos the money from the house will be sitting there until the unit comes up, and if they are paying that sort of rent it will eat it up.
So, is there any way I can let them live there but still not disadvantage myself too much with regards to my plan for this to be an investment property within 6-12mths, if they haven't got a unit by then? Can I rent it cheap, but still claim deductions/depreiciation - how much cheaper could I do it for it to still be legitimate? Is it ok to rent below 'market value', who determines what is market value for tax purposes? If I stay living there with them after the 12mths, then I gather I can't claim anything on the investment side of things, even if they pay board of some kind? Don't get me wrong, I love my grandparents, but I don't want to jeopardise my financial future when there are other options (ie. stay where they are) - and there are a lot of other family members that are financially much better off than me that could take them in.
Sorry this post is so long! Thanks for your help...
