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CGT implications of renting spare room in PPOR

Discussion in 'Real Estate' started by windexoutdoor, 26th Aug, 2011.

  1. windexoutdoor

    windexoutdoor New Member

    Joined:
    25th Mar, 2008
    Posts:
    4
    Location:
    Melbourne
    Hi all,

    I have just purchased a 2 bedroom townhouse in Hawthorn and will rent out the spare room.

    My understanding is that I can deduct half the expenses assuming the townhouse is equally shared. I have two questions:

    1) Can someone please advise the CGT implications this has? I am confused as to whether or not I can maintain my PPOR status and therefore be CGT exempt at sale. Can I rent it our for up to 6 years without impeding my PPOR benefits?

    2) I believe that I am eligible to rent out my spare room and claim deductions without impacting my FHOG handout. Can someone please confirm this?

    Any advice is welcomed.

    Cheers
    Wayne
     
  2. Terryw

    Terryw Well-Known Member

    Joined:
    9th Jun, 2006
    Posts:
    653
    Location:
    Sydney
    I believe you would lose the CGT exemption on the portion rented out.

    You cannot claim the 6 year absence rule unless you are absent.
     
  3. windexoutdoor

    windexoutdoor New Member

    Joined:
    25th Mar, 2008
    Posts:
    4
    Location:
    Melbourne
    Hi Terryw,

    Thanks for your reply.