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Renting out our PPOR - tax implications?

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Your Investment Property | 13 Oct 2011, 12:00 AM Agree 0
We're thinking of renting out our PPOR and buying another property to live in. The median rent in our area is around $300 per week. What tax concessions can we claim when we convert our home to rental? Is it better to just sell rather than rent it out?
  • Irene | 31 Jan 2012, 03:31 PM Agree 0
    If you move out of your home and rent it out for a few years, when do you have to move back in if you wish to avoid paying CGT, if you want to sell this properrty later on? How long do you have to remain in this property before re renting it?
  • John Henry | 14 Jun 2012, 05:02 PM Agree 0
    Hi Irene,
    I heard that there is 6 years rule for this kind of scenario.
  • Pascoe | 15 Jun 2012, 12:52 PM Agree 0
    It would also pay to look at transferring the current PPOR to your partner under "love and affection" rule without any transfer fees and than you can claim the new loan that you get to obtain your new PPOR as a deduction. Basically this allows you to have all your loans on the new rental property and fully tax deductible.
    David, Chan correct me if I am wrong. Do you know of this strategy ?
  • Tom | 14 Jun 2014, 09:50 PM Agree 0
    Rather than increasing the principal payments on the new PPOR, it may be preferable to make the new loan interest only and set up an offset account to pay any spare cash into (in lieu of increasing principal payments). This will have the same effect of reducing your interest payments (which is not tax deductible on your PPOR). The benefit of structuring your new loan this way is that if you decide to upgrade again in the future and decide to keep this new home as an investment property, you will be able to maximise you interest tax deductions.
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