My family and I have been posted overseas for 18 months and plan to rent out our family home. I have heard that there are CGT consequences of doing this? Can you please explain what they are? Can you also explain what we can claim as tax deductions against the rental income?
Hi Ben, The good news is that you can claim the home as your principal place of residence for CGT purposes for up to 6 years so you don't need to worry about CGT consequences unless you are gone longer than that. And even then you will still be CGT exempt for the 6 year portion of the total period if you are gone for longer. As for claiming deductions - you will be able to claim almost ALL expenses incurred on the property such as interest on the loan, repairs and maintenance, insurance, rates, water, etc, etc. My golden rul is if in doubt keep a record of the expenses anyway and let your tax agent determine what can and can't be claimed.
Hi Catherine
ReplyDeleteMy family and I have been posted overseas for 18 months and plan to rent out our family home. I have heard that there are CGT consequences of doing this? Can you please explain what they are? Can you also explain what we can claim as tax deductions against the rental income?
Ben
Hi Ben, The good news is that you can claim the home as your principal place of residence for CGT purposes for up to 6 years so you don't need to worry about CGT consequences unless you are gone longer than that. And even then you will still be CGT exempt for the 6 year portion of the total period if you are gone for longer. As for claiming deductions - you will be able to claim almost ALL expenses incurred on the property such as interest on the loan, repairs and maintenance, insurance, rates, water, etc, etc. My golden rul is if in doubt keep a record of the expenses anyway and let your tax agent determine what can and can't be claimed.
ReplyDelete