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buy PPOR..then move out. Neg gear??

Discussion in 'Accounting & Tax' started by mgmgrand, 8th May, 2016.

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  1. mgmgrand

    mgmgrand Member

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    6th Jan, 2016
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    Location:
    australia
    If you bought a house, move into it, and then want to rent it out, what is the legal amount of time before it can be rented out? Can all deductions be claimed against that rental from when it is able to be rented??

    what if the place is empty???

    I would assume the ato would look at things like the electoral roll, rates notices etc

    we have to move as we would like to stay somewhere closer to work for the first year, and will then move back to our PPOR eg we will rent for 1 year
     
  2. Frosty123

    Frosty123 Well-Known Member

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    VIC
    Where is the property located?
    For example, if it were in Victoria, you would have to reside in the property for 12 months within the first 12 months before you lease it out. If not you may have to pay the SRO back for any duty concession or grants you were given for your first home and PPOR.
     
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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  4. Greyghost

    Greyghost Well-Known Member

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    See Terry's points re 6 year rule.

    Regarding renting timing - usually from time it is "available for rent" you can claim deductions. So that typically is when it is signed up with a letting agent
     
  5. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Location:
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    Issues:

    1. State land tax rules may impose a 6 month period in some cases but doesn't affect income tax;
    2. FH buyer concessions can impose time periods of 6-12 months but its unrelated to income tax;
    3. You must have occupied the property as your main residence and have no spouse, partner property issues. There is no stipulated period of time. However many taxpayers have lacked evidence on appeal when the ATO have denied the residency occurred. You want proof.
     
  6. Marg4000

    Marg4000 Well-Known Member

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    Qld
    If you claim reduced stamp duty for a PPOR then there is a set time you have to live there, otherwise pay the extra duty.
    Marg
     
  7. Perthguy

    Perthguy Well-Known Member

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    Perth
    When I moved into my Main Residence, I did these things and kept evidence of them:
    - moved into the property the day after settlement
    - notified council of my details for rates
    - connected water, electricity, gas in my name
    - changed my address on my drivers licence
    - changed my address on the electoral roll
    - changed my address with my bank to receive statements at home
    - joined the local library
     
  8. Otie

    Otie Well-Known Member

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    26th Mar, 2016
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    Location:
    Vic
    Is there any way a husband & wife can both get the PPOR stamp duty discount?
    It doesn't seem fair that it is available to individuals but couples have to give up one person's right to the discount.
    Is there a work around?
     
  9. wategos

    wategos Well-Known Member

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    Location:
    NSW
    Just rent it out but never tell them - no land tax, no tax on rent. If it was never declared as an IP in the first place ATO are clueless. Plenty of people do this and get away with it, it is not detected. But if its making a loss and you want to negative gear that's another story.
    BTW I don't do this but I know people who do & it p´s me off a bit as I pay a load of tax instead.
     
  10. JacM

    JacM VIC Buyer's Agent Business Member

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    Not telling the ATO about rental income isn't wise... that rental income will arrive regularly in a bank account. Those entries would have to be explained in an audit. Your insurance would need to be changed to reflect that it's now a rental (lie to the insurance company and they will not payout if you need to make a claim. Imagine if the tenants left a candle burning and it burnt the house down.) You'd also need to let your lender know of the change of use in order to not tread on mortgage fraud terrain.