Declaring income

I'm about to purchase the other unit where my ppor is Duplex of 2.

I'm looking to move into the new unit as it will have a lower loan etc and then rent out the first Duplex to my mother ,

A few options would be

Declare market rent of around $375

Declare $200 a week rent and get $175 cash rent

Declare no rent as my mum lives in it and say I'm looking after her and receive full amount cash rent.

Is that seen as illegal looking after my mum (
if I don't declare the cash rent )

I plan on buying. 1 more property in another 12 months I don't believe I will need it for my servicibility But am sure the mortgage broker / bank will ask question when it comes the time
Could be best to do it after next purchase etc

What are your thoughts ?

 

If you are simply letting mum live in your house their is no need to show any rent from that house.

At the same time the costs incurred in holding the house are not tax deductible. They might become part of the cost base of the house when you sell.

If you are renting the home to your mum on full commercial terms you are required to show the income you properly generate.

To prove the commercial nature of the rental arrangement you should have evidence to support the commercial terms of the arrangement.

 

Why not stay in the unit you are currently in, use minimal deposit on the new one and put your Mum in that and keep as much cash possible for the next purchase?

 

Think about the main residence exemption too. Knock down a wall and have one big property?

 

Perhaps just cut in a door. Like adjoining rooms in a hotel.

 

I assume it has 2 titles so not possible

 

2 titles doesn't mean it the whole property cannot be the main residence and CGT exempt. Many properties in Brisbane are on 2 titles.

 

If I pull out a fence panel. Between the two properties so can walk between them would that count. Because I was planning on doing that anyway

 

I basically am doing minimum deposit , I'm doing 89% LVR reason I'm moving into the new one is because I would save on stamp if it's seen as ppor And getting a better rate of around 4.45% with CBA just wasn't sure on best way of claiming the property plus gota better interest rate , my first loan was a LVR of around 95% with Liberty. And it's a high interest rate of 5.75. So thoughts it's best to make that one tax deductible and just leave it as is until it can be refinanced under 80%.


I will have to look into this main residence exemption as I'm not sure what this is .

 

I have a PBR application in at the moment with the ATO asking this exact same question.

 

Then put a lock on both sides