Ppor to ip

Discussion in 'Loans & Mortgage Brokers' started by Popo7, 12th Nov, 2020.

Join Australia's most dynamic and respected property investment community
Tags:
Page 1 of 2
  1. Popo7

    Popo7 Well-Known Member

    Joined:
    26th Dec, 2018
    Posts:
    155
    Location:
    Perth
    What happens if i convert my ppor after only 1 month of living in it then turning into ip? Is this legal?
     
    Popo7, 12th Nov, 2020
    #1
  2. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    10,323
    Location:
    Australia
    Did you claim first home buyer grants, stamp duty exemptions etc for it?
     
    Trainee, 12th Nov, 2020
    #2
  3. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    3,979
    Location:
    Canberra, Brisbane and Sunshine Coast
    If you advise the bank you’ll end up on a higher rate.

    If you obtained any ppor concessions/grants you may no longer be eligible.

    Cheers

    Jamie
     
    Jamie Moore, 12th Nov, 2020
    #3
  4. Popo7

    Popo7 Well-Known Member

    Joined:
    26th Dec, 2018
    Posts:
    155
    Location:
    Perth
    No did not claim anything here that you mentioned.
     
    Popo7, 12th Nov, 2020
    #4
  5. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    10,323
    Location:
    Australia
    Is it a newly built property?
     
    Trainee, 12th Nov, 2020
    #5
  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,629
    Location:
    Gold Coast (Australia Wide)
    Calling TW :)

    ta
    rolf
     
    Rolf Latham, 12th Nov, 2020
    #6
  7. Popo7

    Popo7 Well-Known Member

    Joined:
    26th Dec, 2018
    Posts:
    155
    Location:
    Perth
    Nope
     
    Popo7, 12th Nov, 2020
    #7
  8. Popo7

    Popo7 Well-Known Member

    Joined:
    26th Dec, 2018
    Posts:
    155
    Location:
    Perth
    Tw????
     
    Popo7, 12th Nov, 2020
    #8
  9. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    10,323
    Location:
    Australia
    Might want to look into the impact on depreciation if it's ppor first.
    What are the circumstances? Like, why?
     
    Trainee, 12th Nov, 2020
    #9
  10. Popo7

    Popo7 Well-Known Member

    Joined:
    26th Dec, 2018
    Posts:
    155
    Location:
    Perth
    Gotta new job elsewhere and deciding if it is best to move. Would appreciate your advice. How does it impact depreciation?
     
    Popo7, 12th Nov, 2020
    #10
  11. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,504
    Location:
    Sydney
    Div 40..gone forever. Was always going to b the case if you reside after may 17. But there is a cgt benefit. Div 43 is ok
     
    Paul@PAS, 12th Nov, 2020
    #11
  12. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    41,923
    Location:
    Australia wide
    Why do you think it could be illegal?
    Generally there is no law to prevent you living in the property that you or rent it out.

    There may be a few tax and legal issues though that need to be considered.
     
    Terry_w, 12th Nov, 2020
    #12
  13. BMT Tax Depreciation

    BMT Tax Depreciation Chris Business Member

    Joined:
    22nd Jun, 2015
    Posts:
    370
    Location:
    Australia
    Well, unless they renovate after moving out and add new assets. The only clue I have to go on is that it's not a new house. Is it old/in need of a renovation?
     
    BMT Tax Depreciation, 13th Nov, 2020
    #13
  14. OzziMelbourne

    OzziMelbourne Well-Known Member

    Joined:
    12th Aug, 2019
    Posts:
    186
    Location:
    Melbourne
    ok, let’s have a look at the below scenario.
    For example, I have my primary residence and N IPs. I go to the bank and tell them I’d like to buy one more IP. They assess my borrowing capacity and say no. Then I go to a different bank & remembering the above No I say that I’d like to buy my PPOR and rent out my current one. In this scenario, my borrowing capacity might be different as well as the interest rate.
    Subsequently, I buy the property, live in there for a month and then rent it out moving back to my previous PPOR.
    I guess, my question is if all of this is legal. I doubt so ...
     
    OzziMelbourne, 15th Nov, 2020
    #14
  15. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    41,923
    Location:
    Australia wide
    which is the illegal part?
     
    Terry_w, 15th Nov, 2020
    #15
  16. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    10,323
    Location:
    Australia
    Your doubts are based on which statute or case law? If its not, why would you have that assumption?
     
    Trainee, 15th Nov, 2020
    #16
  17. OzziMelbourne

    OzziMelbourne Well-Known Member

    Joined:
    12th Aug, 2019
    Posts:
    186
    Location:
    Melbourne
    Mainly because I misinformed the bank and was able to get the loan based on that :)
     
    OzziMelbourne, 15th Nov, 2020
    #17
  18. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    41,923
    Location:
    Australia wide
    The crime of financial advantage by deception? 5 year imprisonment max.

    Did you misinform the bank?
     
    Terry_w, 15th Nov, 2020
    #18
  19. OzziMelbourne

    OzziMelbourne Well-Known Member

    Joined:
    12th Aug, 2019
    Posts:
    186
    Location:
    Melbourne
    Wow! But you wrote 10 min ago that there was nothing wrong :)
     
    OzziMelbourne, 15th Nov, 2020
    #19
  20. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    41,923
    Location:
    Australia wide
    I couldn't prove intention back then - but you made admissions.:)
     
    Terry_w, 15th Nov, 2020
    #20
    OzziMelbourne likes this.
Page 1 of 2