Rent My House or Sell It? Tax effective renovations.

pw87 on 05/10/2020 - 18:39

Hi all,

  1. What are your thoughts on selling vs renting out a unit in NE Melbourne suburbs right now? I don't need to sell, but I don't neccesarily want the bigger mortgage either.. perhaps waiting 12-24 months may be better??

  2. If I keep both, the new place will need work. Is there a way I can do this effectively tax-wise, in terms of perhaps doing some of the works and renting it out for a year? Painting, replacing damaged floors, old kitchen, new hedge/fence etc. I believe receipts would need to show the work is maintenance rather than 'capital works'?

Thanks for your help.
PW87

Home & Garden

Comments

  • [Deactivated] on 05/10/2020 - 18:51
    +1

    If you buy a new place and rent our your current place, you'll loose the capital gains tax exemption on your current house, so there is that to consider also (if you're sitting on a gain)

    • pw87 on 05/10/2020 - 19:04

      Cheers, but i already rented my current place out for 12mths a few years ago.

      • [Deactivated] on 05/10/2020 - 19:06
        +1

        Atleast you'll get. 50% discount on the tax.

      • netjock on 05/10/2020 - 19:42

        I would read this

        I believe if you rented it out for 12 months and lived in it for 9 years you only need to pay 1/10th for of the gain as capital gains.

    • Donaldhump on 05/10/2020 - 20:25

      Only if you chose to.

      You can decide at time of the sale if you want to treat it as ur ppor for the whole time, and if so lose a year on the new house.

  • bobbified on 05/10/2020 - 19:06
    +1

    Market prices seem to have dropped now. If you can rent it out with at an amount enough to basically cover your mortgage payments on the place, then just rent it out and wait in the hope that the prices may go back up a little before selling it.

  • SelfMade on 05/10/2020 - 19:59

    Hold it. Renovate and enjoy a better lifestyle with your new kitchen, floor etc whilst also enjoying an increase in your property's value post renovation.

    • [Deactivated] on 05/10/2020 - 20:04

      They're renting it out, not sure the tenants will want to share it with the landlord.

    • pw87 on 05/10/2020 - 20:58

      Sorry if I was unclear. The current place doesn't need a reno, the recently purchased bigger property does, at the very least a paint and some old tiles removed to reveal the floorboards.

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