PPOR Investment Property....

In that case... airbnb some rooms... all kosher.

 

In Victoria lot of first first home buyer live in the property for the first 6 months and then they rent it out in order to be able to claim first home buyer grant.

 

Can do the same in WA as well as long as you live in it within 12 months of purchase for a 6 month period.

 

This is an interesting point. There is a recent Tribunal (Victoria maybe?) decision that held AirBnB to be a licence and not a lease which means it may be alright.

With that said, I wouldn't want to test the boundaries because no doubt the ATO and OSR will be looking to make examples and establish precedent for AirBnB cases. Unless you have the resources to fight a challenge from a government body I would sleep much easier at night just waiting the 12 months before renting out any part of the property.

 

Haha I'm glad to hear it. This example is State specific, however the lease vs licence scenario would likely be relevant to other States. I would check this with a competent lawyer before proceeding down this route though.

I've been on the receiving end of a few legal invoices so I understand the cringe when they come! It does seem crazy to be able to charge from $200/hour anywhere up to around $700/hour (my current rate is about $600/hour after conversion to AUD and tax lawyers in Australia can be as high as $1,100/hour) but the cost of incorrect or poor legal advice can far outweigh this.

As an example, I had a client instruct me to terminate a contract by mutual agreement as they were willing to let the buyer walk. Most people wouldn't think much of it but I asked my client if they were aware that if they have used a standard agency appointment form the agent would still be entitled to their commission which would have left my client out of pocket $10k+...they quickly changed their instructions. Had I have just done what they asked like a lot of lawyers would they would have had quite the headache when the agent issued their invoice. This was all done over the phone in about 10 minutes so about $60 of legal advice in that case saved them over $10k.

 

Also consider the cgt consequences

 

I live on the border of QLD and NSW.

If I purchase the property in NSW as an investment property, there will be no effect on the price of transfer duty cost vs owner-occupier.

I believe if I do end up purchasing in QLD, I would probably need to swallow the transfer duty cost, as I cannot comfortably make the loan repayments for one full year without rental income from leased rooms.

 

Its amazing what a difference of a few hundred metres can make in situations like this!

 

Yes, sometimes I wish we had just one federal system, but then I think we would still have all the politicians and same red tape etc in one way or another, and then no choice to choose a state to live or invest in......and one huge federal land tax bill !

 

Hi Blueskies a bit confused about this one.. are you saying that you have several IPs that you dont live in and rent out, but with lenders you identify them as PPOR? So when you get the mortgage terms and conditions it is for a PPOR with a lower interest rate etc. when infact it is an investment loan?

I thought you can only have one PPOR? do you use different lenders? Interested to know how this works.

 

At the time I had a couple of loans classified as owner occupier which were actually used for both shares and investment property. Last time I refinanced they were reclassified as Investment loans (thanks Westpac) :-(

 

Both were with Westpac and they still allowed two PPOR?

 

Yes, bought new PPOR, retained prior PPOR, both loans were at the OO rate. Next time I refinanced they converted the original PPOR loan to an IP loan.

 

Interesting topic so technically, can we get owner occupier mortgage rate for investment property ,given that ppor with different bank ? in term of tax deduction, i don't see any issue claiming the interest charges at owner occupier rate provided that we declare the rental income right?

 

Definitely a grey area. I would presume it's in the banks due diligence checklist to ask whether you're other loan/s are for owner occupier or Investment purposes. Surely?

I wonder if the bank has a leg to stand on if they were to realise? Could they go and change the rates on you, backdated to when you took out the other loan?

 

Deductibility will be determined by the use of the money.