Buying an IP then moving overseas

Discussion in 'Investment Strategy' started by squarepeg, 1st Jun, 2020.

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  1. squarepeg

    squarepeg Member

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    I'm hoping someone has been in a similar situation, or can offer some advice..

    I have been looking for a PPOR in Sydney for the past while, but may have to move back to the UK at some stage down the track.
    I'd like to turn this into an IP and hopefully have the rent cover the mortgage. The plan would likely be to return to Australia in later life with a decent portion of this paid off. I'd make this my PPOR again for at least 6 months.

    What tax implications am I up for here? I will be working in the UK but I gather I'll be a foreign resident for tax purposes due to rental income.

    Will I still be able to claim the usual IP tax benefits such as interest/strata/management costs even though I won't have Australian income besides the rent? How would this work if I had to contribute extra to the mortgage during the early years?

    Cheers!
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    no tax free threshold
    no 6 year rule
    no 50% CGT discount
    No cost base reset even.
     
  3. Appy

    Appy Active Member

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    Would All those points be the case even if the OP returned to Australia and became an Australian resident at the time of sale?
     
  4. squarepeg

    squarepeg Member

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    This is what I was getting at with the moving back into the property for 6 months bit..
     
  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    nope
     
  6. My House QLD

    My House QLD Well-Known Member Business Member

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    Which suburb will you be buying in? o_O
     
  7. Angel

    Angel Well-Known Member Premium Member

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    Add Land tax.
     
    Terry_w likes this.
  8. squarepeg

    squarepeg Member

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    If was buying a unit would this still be the case?
     
  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Units still have land.
     
  10. Sam_rwd

    Sam_rwd Member

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    Just so I understand clearly - does this apply to all the following scenarios?

    Buy PPOR, live in it for 3 years -> Turn into IP cause moving overseas -> come back and live in it for x time -> Sell it
    Buy PPOR live in it for 3 years-> Turn into IP cause moving overseas -> Stay Overseas and sell it

    Thanks
     
    Last edited: 4th Jun, 2020
  11. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    it could
     
  12. FredBear

    FredBear Well-Known Member

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    Are you an Australian citizen? If not, beware of supplementary land tax in NSW...