Help Needed on dual occupational property

Discussion in 'Accounting & Tax' started by ttn, 13th Oct, 2019.

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  1. ttn

    ttn Well-Known Member

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    Hi Guys

    If I buy an investment property with a granny flat for example and I live in the GF and rent out the main property, how does the rental income and deductions should be calculated?

    Is it based on the land area of each site (ie. 200m2 of GF to 600m2 of the total land so only claim 2/3)

    or pro-rata on the value of the GF vs the whole property ?

    Thanks in advance
     
  2. Terry_w

    Terry_w Well-Known Member Business Member

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    its not the land size. There is a thread on here within the last week discussing this topic.
     
  3. ttn

    ttn Well-Known Member

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    Thank you Terry

    Sorry did not know there was a thread on the same topic
     
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  4. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Each cost needs to be considered separately and adjusted for the private use portion and reasonable apportioned.

    eg :
    - Real estate PM fee may be 100% deductible as may LL insurance. These costs are dedicated and directly tied to the rental. BUt if the building policy was joint then some basis to apportion the two dwellings is needed.
    - Rates - Likely % as a % of the land area
    - Interest etc may be % based on the portion of the original acquisition cost. Valuation apportionment may be needed between the house and its land and the GF and its land.
    -
     
  5. ttn

    ttn Well-Known Member

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    Thank you Paul
     
  6. Michael Mitchell

    Michael Mitchell Well-Known Member

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    Also, make sure what you want to do (eg. live in granny flat and rent out main premise) is actually permissible in your local city council based on zoning and land use restrictions.