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#1 ~~KylieB~~

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Posted 11 August 2010 - 12:23 PM

We need a bit of advice. Our home is currently on the market and we have placed an offer in on a new house. We currently own this home outright but would need to have mortgage on our new house. We have spoken to our mortgage broker and basically we could afford to have a full mortgage on the new place and rent this one out

Can anyone give us a rough idea of the expenses involved, IE property management fees etc. We would have to cover the rates, water and maintenance is there anything else we havent thought of

Also, the other option we have is to settle on the new house and keep this vacant for a few months until it sells. I am aware that you would pay Capital Gains on the property once it is a rental but what if we dont tenant the property out and sell it a month or so after moving into a new home, are we up for Capital Gains as technically our residence is our new home
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#2 T-T

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Posted 11 August 2010 - 12:42 PM

QUOTE(~~KylieB~~ @ Aug 11 2010, 12:23 PM) View Post

Also, the other option we have is to settle on the new house and keep this vacant for a few months until it sells. I am aware that you would pay Capital Gains on the property once it is a rental but what if we dont tenant the property out and sell it a month or so after moving into a new home, are we up for Capital Gains as technically our residence is our new home


Ooh exciting times! smile.gif

I'm not sure about QLD but I know in Melbourne you don't have to pay capital gains tax on the property if you sell within the 6 years (I think) after you cease to live in it. (I imagine it's the same Australia wide but I'm definitely not 100% sure)

ETA Here's the information for you!
http://www.ato.gov.a...ntent/86191.htm

#3 karry327

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Posted 11 August 2010 - 01:01 PM

Expenses would be water services (not usage, tenants would pay for that), Council Rates, Property Management Fees (approx 6%), Repairs - all of which you've covered pretty much.

All these expenses would be offset against the rental income you receive which would then be added to your taxable income.

If you sold the property without leasing it out, there'd be no capital gains payable as you've not used it for investment purposes.

I'd be keeping both properties if you can!

#4 beachgurl

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Posted 11 August 2010 - 01:51 PM

I thought that if you have more than one property, you have to nominate which of those properties is to be capital-gains exempt?

property management fees can be as high as 8.5% in metro areas.

Another thing to consider is that it may be difficult to obtain insurance for the property if you are going to leave it vacant for a few months. If you don't want to pay CGT or only minimal, get a valuer out to value the house before you move out. If you do get charged CGT it would only be on 50% of the increased value of the house. The way values are starting to stagnate you may find that you won't be up for any CGT in the next 6-12 months if values don't increase and you sell in that time.

#5 AK2

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Posted 11 August 2010 - 02:26 PM

It really depends what state you are in. For Qld, you'd be looking at paying

*Monthly RE agents fees of up to 8.5%
*Advertising and 'Letting Fees' of up to 1 weeks rent + GST every time a new tenant has to be found
*Monthly administrative fee, normally around $5
*Landlords Insurance
*Rates, Water Usage (tenants have to pay excess water, which is usually usage over 55kL qtr)
*Repairs and Maintenance on the property




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