Tax implications on living in IP

Discussion in 'Accounting & Tax' started by Jooles72, 1st Aug, 2015.

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  1. Jooles72

    Jooles72 New Member

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    I currently live in a rural area and have an IP down in the big smoke of Perth. Due to an opportunity being offered to my son i need to move to Perth for 2 years. If I decided to move into my investment property for this period what tax implications should I consider?
    I'm also considering purchasing another property just for the purpose of us living in for 2 years and then maybe converting it to an IP - Again more tax implications.
    Should I lease and become a renter for 2 years. I hate the idea of paying rent to someone else.
    Aargh so many things to consider, bloody kids . Lol
    Love to hear some thoughts....so fire away.

    Cheers
     
  2. Terry_w

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

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    Should you lease? will depend on the rent you would be willign to pay and if the current property is negative geared or not. It may work out financially better in the short term.

    But living in the property would enable you to establish it as the main residence, perhaps - depends on the situation. This could come in handy down the track when selling.
     
    Kael likes this.
  3. thatbum

    thatbum Well-Known Member

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    Why? Isn't it the same as paying non-deductable interest on a mortgage to the bank?
     
  4. Jooles72

    Jooles72 New Member

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    Yes...very true. Just rather pay my own mortgage off than someone else's.
     
  5. Terry_w

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

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    But you will be receiving rent and tax deductions.
     
    legallyblonde likes this.
  6. Jooles72

    Jooles72 New Member

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    Haha...thanks guys. Doing my usual trick of getting emotional and over thinking things when I should just work the numbers :p;)
     
  7. legallyblonde

    legallyblonde Well-Known Member

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    It is going to be a case of numbers. Renting can in many cases be a better option, I would not dismiss it so quickly.
     

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