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Meegan

Discussion in 'Introductions' started by Meegan, 31st Mar, 2010.

  1. Meegan

    Meegan New Member

    Joined:
    31st Mar, 2010
    Posts:
    1
    Location:
    Darwin NT
    Hello
    I have been living in my property for 3 years. I am going to rent it our for 12 months maybe longer while going away for work. Should I turn it into an investment property. I will be moving back in and doing renovations at the end of my job away. Can anyone offer any advise.

    Thank you
     
  2. MattR

    MattR Well-Known Member

    Joined:
    23rd May, 2007
    Posts:
    229
    Location:
    Sydney
    Hi Meegan

    By renting out the property you will be turning it into an "investment property" which means you may lose your Capital Gains tax exemption on PPOR (Principle Place of Residence)

    However you may be able to use the Six Year Rule to reduce or nullify any potential CGT.

    There are other things to consider as well, such as depreciation, initial repairs etc etc.

    Good luck & Welcome on Board
     
    Last edited by a moderator: 9th Apr, 2010
  3. Billv

    Billv Getting there

    Joined:
    15th Jul, 2007
    Posts:
    1,796
    Location:
    Sydney, NSW
    Meegan

    It depends on how long you are going away for, if you have a mortgage, who you will rent to etc.

    Often tenants damage properties so if you are only going away for a short period and you don't need the money I'd advice against it.

    You'll pay tax on the income but you will also be able to deduct
    mortgage and maintenance costs, rates, strata fees, depreciation etc.

    If you are not claiming another PPOR you won't have any capital gains tax issues for 6 years.