I thought I'd better look into this before we commit to building and now I am more confused than ever.
PPOR bought 2004 and moved into immediately. We have been in it ever since.
Planning to put a granny flat on part of the land and rent it out. Rent will be minimum $250pw if we do a residential lease. Borrowings to build and landscape will be 100K so we'll be earning extra income unless we structure it as a loss (shorter loan term? is there any point?).
PPOR is in name of highest income earner only, he is now in top tax bracket. Second income earner is defacto of 10 years but chose not to be on title at time of buying (risks associated with that decision now resolved) second income in lowest tax bracket. We have a family trust that was used to distribute extra income from consulting jobs it is now dormant as we no longer have time for extra work.
I know if we sold the existing property today there would be no CGT as it has been our PPOR for over six years but what if we borrow to build an income earning second dwelling on the land?
We plan to hold it for at least 12 months, probably more likely to be 5 years.
I thought it was as simple as working out the portion of land developed and pro rata of gain minus costs and depreciation. Looks like there is more to it than that
Any advice appreciated
Carol
PPOR bought 2004 and moved into immediately. We have been in it ever since.
Planning to put a granny flat on part of the land and rent it out. Rent will be minimum $250pw if we do a residential lease. Borrowings to build and landscape will be 100K so we'll be earning extra income unless we structure it as a loss (shorter loan term? is there any point?).
PPOR is in name of highest income earner only, he is now in top tax bracket. Second income earner is defacto of 10 years but chose not to be on title at time of buying (risks associated with that decision now resolved) second income in lowest tax bracket. We have a family trust that was used to distribute extra income from consulting jobs it is now dormant as we no longer have time for extra work.
I know if we sold the existing property today there would be no CGT as it has been our PPOR for over six years but what if we borrow to build an income earning second dwelling on the land?
We plan to hold it for at least 12 months, probably more likely to be 5 years.
I thought it was as simple as working out the portion of land developed and pro rata of gain minus costs and depreciation. Looks like there is more to it than that
Any advice appreciated
Carol
