Land tax and depreciation when renting out PPOR

Hi

I own a home in NSW which has been my PPOR for 18 months. I am considering of moving back to my parents home for the next 2-3 years and will return to my PPOR after that.

Just wondering if I will need to pay land tax for the period that I am renting my PPOR? Also, am I entitled to claim depreciation on the property during this time?

Thanks

 

While the article in this link is primarily about CGT exemptions, I believe it may answer your question:

Capital Gains Tax Exemptions | CGT Residence Exemptions

Land tax shouldn't be an issue if this is the only property you own in NSW, as it will fall under the threshold.

You'll be able to claim depreciation if you're claiming income (or can demonstrate that you're trying to produce income) from the property.

 

Thanks for the reply.

I own an investment property and the land value is above the threshold of $549,000 so I am already paying land tax on this property. However, my PPOR which I will be moving out of in the next few months will also be rented out. Does this mean I will need to pay land tax on my PPOR as it is being rented out, or am I exempt given that I have lived in it for 18 months?

Thanks

 

Depends where the home is and your citizenship....Land value in Pt Piper and many other suburbs can easily exceed the threshold.

I generally recommend you register for land tax even if under thresholds just to be sure. That way if a law changes they can keep you updated. This issue is important for the land tax surcharge for example. eg : Are you a citizen ? If not you could be liable for land tax surcharge but not land tax itself.

As you already pay land tax the former home will add to this and definitely add to the tax cost. If you are not single there could be a strategy to split ownership with spouse before you move out. Land tax doesnt give a exemption easily for a former home.

Yes - Seek guidance from a QS on the available depreciation deductions for your property. If they say its not worth it (rare) then you will be certain.

 

Yes and Yes

Consider the timings.

 

1. Get QS report paid before 30 June to bring deduction for cost fwd.
2. Timing for land tax probably limited for NSW and based on expected timing but some taxpayers can defer the rental until after the land tax date. eg In NSW better to remain in home until 1st January then make it an IP.