Taxing issues…

I sold my PPR and than became a tenant and paid rent.  At the same time I owned 3 investment properties but hadn't yet moved into any of them. Am I entitled to choose one of my investment properties as my new PPR or do I have to actually live in one of them to be able to treat it as my PPR?

Thankyou
Terry

To treat one of your investments as your PPOR you must live in the property for a period of time.

Regards
Edward Chan
Chairman – Chan & Naylor Australia www.chan-naylor.com.au

I hope you can give me some advice.

I purchased an apartment back in 1990 and lived there for 18 months, after I separated from my husband.  At that time (until now) I also owned and still own several investment properties all in my sole name. 

I moved in with my parents after living in the apartment, as both my parents were ill and needed caring.  My parents died in 2003 and 2005.

After moving out of the apartment, it was rented out until I sold it in July last year for a considerable profit.  I am using the sale proceeds from the apartment to demolish my parents house and build a new house.

Do I have to pay any capital gains tax?  If I do, is the tax rate the same as your income tax? If this has any bearing, I am now 59 years of age and living on rental income.

Brigitte

From the time you moved out of the apartment you can still treat your apartment as your Principle Place of Residence (no tax) for up to 6 years even if you were not living in it as long as you did not have another Principle Place of Residence.

Regards
Edward Chan
Chairman – Chan & Naylor Australia www.chan-naylor.com.au

I have owned a family home since 1996 and I rent it out, it has a mortgage less than  $50,000. I bought another house in Sept 2007 which I reside in but Im fiinding 2 mortgages a little scary as I'm a sole parent. I thought about selling the house that I bought in 1996 and having only a small mortgage on the house I live in and live "easier" by doing so. My question is If I sell my first property what bracket or percentage of tax would I be paying from the difference of the price I purchased it for to the tax rate on the profit I have made based on it's sale price in today's market. If I can keep it I would because my motivation was for it to be my super fund because I hardly have any super and I am 48 yrs old. Both loans are fixed for 3 yrs at goods interest rates.

Thank you
Annette

If you are selling the first property the capital gains tax is the difference between the sale price and the purchase price less 50% discount taxed at your personal tax rate depending on what other income you earn. There would be a further exemption depending on whether you lived in the first house for a period of time

If you are selling the property due to the non deductible interest on the new home which makes the repayments extremely expensive and unaffordable than we have a solution that can alleviate that concern and make it more affordable so that you can keep both properties. But the strategy is quite complex and you need to sit down with an Accountant from Chan & Naylor to show you how it's done.

Regards
Edward Chan
Chairman – Chan & Naylor Australia www.chan-naylor.com.au

If I am selling a property and not investing in a new one, but instead putting the money in a term account, what tax does an Australian citizen have to pay on the money. I basically am curious as to what the personal tax laws are in Australia for a situation like this.

Thank you for your time
Nancy Gengler

If you deposit the money in a term deposit and earn interest on the term deposit than that interest is added to your other personal income and the aggregate determines the tax rate you will be in. You can go to the ATO website to see the tax rates and thresholds.

Regards
Edward Chan
Chairman – Chan & Naylor Australia www.chan-naylor.com.au

A bookkeeping question: Want to know what's the best way to set up bank accounts to make it easier for accountant and the tax man at the end of financial year
I am currently setting up to buy my next investment property and we are buying it under a property investor's trust (with a company trustee) that already holds another investment property.
I regularly transfer part of my income into this account and rent will go into the  same account  by the property agent.
Repayment will then be made from this account to the loan account monthly.
My question is, Can i use the same bank account for the new property with rent from the next property going in the same account or should i start a new account
thanks
Ken Lui

Assuming you have a property manager looking after your properties, using one bank account is fine. The reason being is that the property manager should provide you with a tax summary at the end of each financial year which totals all income and related expenses for each property. However, it is certainly important to keep each property loan separate so you can ascertain the interest attributable to each property.

Regards
Stuart Wemyss
Director – ProSolution www.prosolution.com.au

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