Hi, New at this but we are about to take of and join you guys out there. my question is; we are about to rent our home out while we are away (possably years) can any one give advice on tax from rental monies, is it worth while renting or just sell and be done with it.????
sculptar said
09:40 AM Jul 6, 2010
Hey Manhattan,
I am new as well, I have no idea of the tax implacations. Although I have rented out the house. I think it's better to have some place to come back to! You may not be able to buy back in when the time comes.
-- Edited by sculptar on Tuesday 6th of July 2010 09:41:57 AM
Zoomtopz said
10:58 AM Jul 6, 2010
I will be doing that soon too - from what I hear you S K I . So , methinks that"s a great idea - shoot-through & Spend th Kids Inheritance . Richo.
-- Edited by Zoomtopz on Tuesday 6th of July 2010 11:00:53 AM
BobnBev said
11:49 AM Jul 6, 2010
Manhattten, Big decision..Ask you acc. about it...Have meet a lot of travlers over the years and some have said it was the biggest mistake to sell and have no place to come back to.. Me ? If you can get GOOD people to lease your home do it, "some where i did hear that rentting dose not give you control ..leaseing dose"?? could be wrong . for a year and then look at what is?? then make your decision. property is only going to go up..getting back in will be hard, IF you find that the road is not for you .If you are on the pension you can earn quite a bit and still pay no tax. .Im not in anyway a adviser on things like this ..Its what we do, and its worked out well for us and still dose....Bob nBev
Nicholstones said
06:09 PM Jul 6, 2010
We are on the road long term and have our house in Melbourne rented out. We discussed selling but once you are out of the market it would be very hard to get back in if it keeps going crazy. If it goes down then no problem, we will either be moving back in and not selling anyway, or selling and buying somewhere else which will presumably also have gone down so we won't be any worse off.
We have had our house rented out several times before when we worked overseas for some years and have never had any issues with tenants, I reckon that it being a nice 'home' rather than a rental property we get a different sort of tenant, often overseas professional couples.
Only your own adviser or accountant can talk to you about the income tax implications for the rent, but note that you can have it rented out for up to 6 years before you would be liable for any capital gains tax on disposal, as long as you are not claiming any other home as your primary residence.
Peter_n_Margaret said
06:44 PM Jul 6, 2010
Profit (after expenses and depreciation) is taxable.
Talk to a tax adviser. It may be worth getting a depreciation schedule prepared to maximise the depreciation (and minimise the tax liability). The bigger the tax liability though, the more you have left over in your pocket.
Renting your house also has implications for Centrelink, if you are on a pension.
Best to rent it anyhow.
Put it in the hands of an agent to manage it as this takes some of hassles away and makes insurance easier. The agent's fees are tax deductable too.
Cheers,
Peter
jimricho said
06:59 PM Jul 6, 2010
Definitely agree with Peter re using a managing agent. They usually have a handle on who's a good tenant and who isn't. I have found that if one does the right thing by the agent and the tenant the agent will select the best tenants for your property. Agents are familiar with the tenancy laws and these can be a minefield, especially with a "problem" tenant, the law is very much on the side of the tenant. Using an agent is even more important if away out on the road.
Also re using a tax adviser, if you get it wrong it can be costly.
Cruising Granny said
07:56 PM Jul 6, 2010
Some of my friends left their places empty while they travelled. Once they got the hang of it, they sold - well, one has sold and the other is selling.
Apparently lifestyle village real estate can be trickier.
By the time you've done a few miles you will realise how comfortable you can be in your new space on your new real estate - the road.
I don't have a base, but where I'm parked is where I live whether it be 1 week or 2 years.
It's always your decision and what you'll be happy to do.
If you lease your home you'll have to store your furniture or leave it in the house for the tenants. Tenants vary by degrees of lifestyle.
Would you want to come back to live in someone else's house after your time on the road?
Lots to think about. All the best with that. Only you will know what's right for you. Safe and happy travels.
Manhattan said
06:42 AM Jul 7, 2010
Hey, wow what a great respose. thanks to you all. sound like get advise and keep the house for now. once again thanks.
elliemike said
08:38 AM Jul 7, 2010
Cruising Granny wrote:
Some of my friends left their places empty while they travelled. Once they got the hang of it, they sold -
We found out from our insurance people, (just by chance) that we cant leave the house unoccupied for more than three months.
Needs to have someone living in it after three months, to keep the insurance valid. Not sure if all companies have this rule but it is worth having a chat to them to see what their rules are.
We have good neighbours and rellies checking the house out regularly. But that is not good enough after the three month time period. We get a house sitter in if more time on the road is expected.
jimricho said
04:48 PM Jul 7, 2010
elliemike wrote: We found out from our insurance people, (just by chance) that we cant leave the house unoccupied for more than three months.
Needs to have someone living in it after three months, to keep the insurance valid. Not sure if all companies have this rule but it is worth having a chat to them to see what their rules are.
We have good neighbours and rellies checking the house out regularly. But that is not good enough after the three month time period. We get a house sitter in if more time on the road is expected.
My Insurance Co requires that they be notified if the house is unoccupied for more than 60 days. There is no excess if unoccupied for up to 90 days but they require that arrangements are made to stop deliveries (paper etc) collect or redirect mail and have grounds attended to (mowing etc).
As these things vary from one insurance co to another it's vital to check these issues out with one's insurer.
Regarding rental property, there is a separate policy that covers this called Landlord Protection Insurance (or a similar name). Note also that the owners insurance does not cover the tenants property (contents). Also in the case of Strata Title property the Owner's Corporation (Body Corp in some states) insurance only covers common property and building structures, eg the building and internal walls are covered but not the paint on the walls. This is the case in NSW but may vary from state to state.
I am new as well, I have no idea of the tax implacations. Although I have rented out the house. I think it's better to have some place to come back to! You may not be able to buy back in when the time comes.
-- Edited by sculptar on Tuesday 6th of July 2010 09:41:57 AM
So , methinks that"s a great idea - shoot-through & Spend th Kids Inheritance
Richo.
-- Edited by Zoomtopz on Tuesday 6th of July 2010 11:00:53 AM
We have had our house rented out several times before when we worked overseas for some years and have never had any issues with tenants, I reckon that it being a nice 'home' rather than a rental property we get a different sort of tenant, often overseas professional couples.
Only your own adviser or accountant can talk to you about the income tax implications for the rent, but note that you can have it rented out for up to 6 years before you would be liable for any capital gains tax on disposal, as long as you are not claiming any other home as your primary residence.
Needs to have someone living in it after three months, to keep the insurance valid.
Not sure if all companies have this rule but it is worth having a chat to them to see what their rules are.
We have good neighbours and rellies checking the house out regularly. But that is not good enough after the three month time period.
We get a house sitter in if more time on the road is expected.
As these things vary from one insurance co to another it's vital to check these issues out with one's insurer.
Regarding rental property, there is a separate policy that covers this called Landlord Protection Insurance (or a similar name). Note also that the owners insurance does not cover the tenants property (contents). Also in the case of Strata Title property the Owner's Corporation (Body Corp in some states) insurance only covers common property and building structures, eg the building and internal walls are covered but not the paint on the walls. This is the case in NSW but may vary from state to state.