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Rent part of principal place of residence, is that ok?

Discussion in 'Real Estate' started by jamesyu, 14th Aug, 2008.

  1. jamesyu

    jamesyu New Member

    Joined:
    14th Apr, 2007
    Posts:
    1
    Location:
    Sydney
    Hi All,

    this is my first post in here, I have been reading some excellent posts the whole morning while I am in a deadly bored training... :)

    Here is my situation.

    1. I brought my house in last July and I lived there since then.
    2. This is a three bed-room house, and I want to rent two of them.

    My question is can I claim loan interest and other related cost as tax deductible ? because I still live here, so it is still my PPR, only part of it is rented out.
    so do I need to tell anyone I am doing that?

    I tried to search ATO webpage, but didn't find anything.

    Many thanks in advance.
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    If you want the tax deduction, you will need to declare all income received and you will lose some of your CGT-free status. You also wouldn't be able to claim all loan interest - you would have to apportion it somehow.

    The whole things gets quite complicated - I suggest you talk to your accountant before going down that path.

    I think just taking on a boarder or two to help you pay your overheads and not declaring the income probably won't cause you any problems if you aren't trying to claim expenses as well. Again, advice needed there.