Home advantage for movers who keep their house

WE currently own our own house but are moving interstate and are looking to rent our place of residence instead of selling it. Are there any tax benefits we can consider if we do this and rent elsewhere instead of buying where we move to?

If you buy one house and sell another, you could lose up to 10 per cent of the price of the house in buying and selling costs and associated expenses.

Therefore, I favour retaining your present house and renting elsewhere unless you believe you will never return to the area where you live now.

Once you rent out your home, you can claim ongoing costs, such as interest rates and maintenance, as a tax deduction and you can be absent from it for up to six years without losing the CGT exemption, provided you do not claim any other property as your principal residence in that time. I AM 67 and working full time. Am I able to salary-sacrifice into my superannuation to reduce my income so that I would be eligible for a part age pension?

Money salary-sacrificed into superannuation is regarded as income for the Centrelink income test.

Therefore, your proposed strategy would not be effective. WE are on a full pension. I have been offered a part-time job with an income of $19,500 a year. Our joint age pension currently is $34,382 a year.

I understand that I will lose 50c in the dollar on approximately $5000 of this income allowing for what we are allowed to earn.

We have no financial assets – but a mortgage of $150,000 on our home.

But will I lose $0.19 in the dollar on the income from work? If this is the case, it would not be worth me working, particularly as there are travel costs, etc to meet.

Let’s do the calculations. As you point out, your pension will drop by $2500 a year to $31,882 jointly, which will be apportioned as $15,941 to you – add wages of $19,500, making your taxable income $35,441.

The tax on this would be $3276, but you would qualify for the senior Australian pensioner tax offset of $978 plus the low income tax offset of $445.

Thanks to these offsets, you would pay about $1852 on the extra income of $19,500, which is about 10 per cent.

To me it’s fantastic that you are getting a job – it should be great for your wellbeing as well as adding almost $18,000 a year to your family net income.