Best way to Minimise Tax on House

  • Thread starter orange_juice
  • Start date
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orange_juice

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Hi,

The current scenario that I have is that I own a house for 5 years, paid no Stamp as FTB at time. Have just got Married and the Wife has a House as well for the same time period. I have moved into her place and am going to pay half mortgage, etc. No probs here I think.

However what to do with my own house and to minimise any potential tax liability in the future from a sale.

I am thinking of letting it out now, rent will more than cover the Mortgage, therfore wil have to pay some income tax here, not too much though.

However my concern is the status of the house will change to an investment property. I know that I can claim the time I spent in the house as Owner Occupier & also for the last year as well, since I have lived there previously.

Would I be better to sell the house now and just buy an equilvalent property with the proceeds?
Suppose the mortgage would go up and also the legal costs assiciated with it as well.
 
orange_juice said:
However what to do with my own house and to minimise any potential tax liability in the future from a sale.
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Sell it now or within 12 months and you have no tax (CGT) on any gain?
I am thinking of letting it out now, rent will more than cover the Mortgage, therfore wil have to pay some income tax here, not too much though.
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How do you know? All rental income less allowable expenses is assessable for tax. Not just the excess of the rental income over the total mortgage repayments (unless interest only).
Would I be better to sell the house now and just buy an equilvalent property with the proceeds?
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Why would you do that?

You really need to assess whether or not property investment is the most suitable investment for your specific needs right now. And then crunch the numbers to assess the viability of such a business opportunity.
 
Thanks Clubman,

Thought I had it in the right place.

Is it not the case that the Interest Portion of the Mortgage Repayment is allowable as a deduction?
Ta
 
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