What is the go with two PPORs?

[Ray Brown]

Hi all you brainy people,

say you have a PPOR in City A and you have to move away for a more than a year.
You don't want to rent a place in City B - but you don't want to sell your PPOR to raise cash. So you let your PPOR to someone in City A and then buy a new PPOR and live in it for say 18mths in City B. You then return to City A and live happily ever after. You sell nothing.

What happens with stamp duty concessions, CGT events, and claiming the properties as IP's?

Please could someone enlighten me?

 

[Simon]

YUou can claim them as IP's for the dates they are available to rent.

You will have triggered no CGT events so none payable. If you do sell then I think you will just claim the first place as your PPOR for the period.

I doubt you will get SD concession for the second place as you are not a First Home Buyer.

Cheers,

 

[Ray Brown]

Thank you Simon,

OK on the first bit.

The Stamp duty concession... was about how you get a discount if you are going to sell it or live in it within 12mths of purchase, your stamp duty would be say $3000 as apposed to $7500 if you weren't going to live in it. (QLD situation)

 

[Les]

G'day Ray,

First off, as I'm sure you already know, I am not an adviser - but this is what I think could be right....

1. From your words, the second house is a temporary residence that will later be a rental (you did say you wouldn't sell either house......)

2. As I understand it, YOU choose which property is to be your PPOR. And you can leave your PPOR (and even rent it out) for up to 6 years without losing CG exemptions. Conditions are like "After 6 years, you must stop renting it (or move back in) to retain the CG exemption" ..... So, retain your original place as your PPOR, and treat the second as though it will always be an IP (when setting up loans, structures, etc.) The fact that you will live in the "IP" for a short time should make little difference.

Of course, when you are LIVING in the "IP" you won't be able to claim the usual Tax deductions on it, but you SHOULD be able to claim these on your PPOR while you are renting it.

Have your friendly accountant confirm all of this, of course,

Regards,

 

[redwing]

My understanding of the history of this is that this benefit was set up for politicians who got posted overseas in days of past and still runs true today??

REDWING

 

[Ajax]

Hi Redwing,

I think you mean public servants (DFAT and Australian embassy/consular staff). I'd be fairly annoyed if my federal or state member was posted os for up to 6 years.


Ajax

 

[Ray Brown]

Thanks Les,

excellent, helpful answer. Not advice I know, just your opinion. Cheers