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Buy second home

Discussion in 'Accounting, Tax & Legal' started by pearls, 8th Oct, 2012.

  1. pearls

    pearls Member

    Joined:
    20th Aug, 2012
    Posts:
    17
    Location:
    qld
    Hello,

    My husband own a small unit with mortage against it 200k, he has not made any extra repayments as his budget did not allowed him. Now we want to buy a small unit about 140K by taking another home loan, keeping the first home without selling, our situation is both working ful time jobs with decent pay, I do not have permanent residency but my husband holds citizenship, we rented our own unit and living in a rental property since 5 months as we wanted some place close to work, if we buy a second home now, will it be subjected to CGT? is it a good option to buy without selling our first home to save on tax?

    we will be paying tax on our first home rental income as we can claim upon depreciation, is it possible to claim on the second home too if we buy the property on my husband's name and rent it out.

    kindly advise


    Regards

    Pearls
     
  2. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    653
    Location:
    Sydney
    Yes, you could possibly sell the existing unit CGT free.
     
  3. pearls

    pearls Member

    Joined:
    20th Aug, 2012
    Posts:
    17
    Location:
    qld
    Thanks Terry,

    I am just wondering if it is anyways possible to keep our existing unit and buy 2nd home, rent both properties, paying 50% tax on rental income and claim some tax back on both of them in terms of depreciation etc, is that possible??


    Regards,

    Pearls
     
  4. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    653
    Location:
    Sydney
    Not sure what you mean about the 50%, but if you rent both houses out you could claim full deductions on all expenses including depreciation etc. But only one could be CGT free as your former main residence