Stretching the limits of living at home
Q: After moving out, how long can I claim the family home as my main residence for tax purposes?
A: For residents moving to Townsville or moving out of Townsville, many of you may not be aware of your tax options in relation to the family home.
There is no urgency to sell your home and you can decide to sell when the market picks up, or when your circumstances permit.
You have up to six years, or indefinitely, depending on your circumstance.
If you lease your home for the period that you are away, you can continue to claim it as your main residence for up to six years.
If you do not lease your home for the period you are away, you can claim your home as a main residence indefinitely.
This means that you will not be hit with a tax bill when your home is sold.
You can only claim one main residence for any one period and exceptions apply if you are moving overseas.
Other perks of being a landlord are that you can claim interest payments on the mortgage over the home as well as your other holding costs against the rental income.
This means that any income tax liability that may arise will be small.
If you make a loss, then that loss may be applied against any other income that you have that year.
So, if you want to go travelling around Australia for an extended period, you can just go.
If you are leaving Townsville, you do not have to sell before you leave.
If you have just moved to Townsville, you can take the time to decide where you want to buy.
It is important to know your options.
If you have any questions, please feel free to contact the JCU Tax Clinic.
— Van Le is the director of the JCU Tax Clinic.