Would you sell if you were me?

@nauq I would only sell if you worry about the current investment. The etf may tank as well so you need to be prepared for that mentally
 
@nauq 6-year rule only applies if you didn't have another property you were claiming MRE on. since you are, it doesnt apply, so you will incur CGT.
 
@resjudicata This isn't entirely true, you can choose which property you claim as the main residence and the choice is made in the financial year that you sell a property. So OP could likely sell IP with no CGT but then would need to pay CGT on current PPOR if they ever sold in the future.
 
@nauq Absolutely I would sell in your situation.

I would'nt even put $150k into ETFs but just put that full $300k capital into the offset on your PPOR. Offset is a guaranteed tax free return equal to your morgage rate , you'll struggle to find a better deal than that ! Having your PPOR paid off is an amazing life position. I'd be aiming for that ASAP

After tax returns on the investment property might come out ahead long term over the offset option but its a lot of risk for not much extra reward.
 
@nauq I guess the question is do you want your money in housing or shares and how much do you want the 50k to explore whatever it is with your partner, I’m assuming your parents aren’t desperate for the 50k. How comfortable are you in having an investment property? Is it a hassle, do you prefer just having one mortgage to think about.

Personally as it’s positively geared I’d probably just stay as you are right now. There’s still a lot of uncertainty out there and if you’re not struggling financially you can always sell another time.
 
@nauq I would get proper tax advice on the issue because it becomes complex. Have you considered the future impact of treating your current investment as as your main residence? For example if you go to sell your current residence in the future you would have to pay CGT on it for the period you treated your current investment as a main residence (e.g. they both can't both be your main residence for a period of longer than 6 months source: https://www.ato.gov.au/Individuals/...ing-former-home-as-main-residence/#Howitworks). There are a number of factors a good accountant would take into consideration before suggesting a path to take. Given the size of a potential CGT bill both now or in the future I would suggest it would be both prudent and cost effective to get proper advice.
 
@nauq You can usually tell a landlord's attitude about their IPs by the condition they are in. I would sell out and use the money to enjoy life while you take time off work. As most people will work until the day they retire + some gigs thereafter. It's pretty sad when people can't enjoy the fruits of their blood, sweat and tears (mostly tears in Australia). Your plan sounds solid, but I am fascinated about Australians obsession with the offset account. Just pay it down rather than leaving it there for an emergency. Does every Australian have some type of anxiety around life?
 
@nauq Seems like a no brainer.

Give back the money you owe.

Personally I would sell, and stick the profit on the mortgage.

Once you take tax into account it works out a lot better an the etf. You pay your mortgage out of your post tax income.
 
@nauq Pretty sure the 6 year rule is for someone forced to move out of their PPOR to rent elsewhere. Not someone who bought another place to live in.
 
@nauq Real estate is all about leveraged returns. You’ll loose your leverage and the asset isn’t costing you anything to hold.

I wouldn’t sell.

The only argument that I personally would accept to sell if I were you is that you’ll get to pay your parents back and do some things with the money you’ve been waiting to do.

Once you go over the 6 years just get a valuation at the end of the 6 years and this will set your cost base. Up to that amount will still be CGT free. But then again, because you have another PPOR you’ve been living in the 6 year rule actually applies differently. As soon as you moved into your new PPOR you loose the benefits of the 6 rear rule and only get 6 months to sell. So you’re actually going to be up for some CGT as well. And a fair bit possibly because you’re already in a higher tax bracket.
 
@nauq Surely you are not serious about selling!
You will absolutely be worse off
Creating a taxable event, the fees and costs associated with the sale.
Your net position will be smaller. And to achieve the same benefit to your net position the ETF will have to achieve much more than benchmark just to compete with a $1m property growth, e.g 10% vs 3% Assuming both go up. 300 in offset while low risk wont provide anywhere near the benefit of holding a positive property..
 
@nauq Honestly you have done all the hard work and really need to hold these for a full 10-15 years. The goal should be to hold until this one pays off your own home…… the return for the effort seems a little disappointing TBH…..next year the rates will drop at least .75% and rents will only go up for the next two years! No way known they can build what is needed now! This will push prices higher and rents! Hang in there!
 
@nauq You're only 30. What's the hurry. Use the rule of 72 to determine when you will double you're investment and then sell after that.

Sit on it for as long as you can and let it appreciate as much as humanly possible. I mean it sounds like you're not needing emergency funds or anything?
 

Similar threads

Back
Top