Structure for accidental landlord
Question from Shaun updated on 24th April 2012:
Our expert Mark Withers responded:
I assume you own the property jointly. Given things are up in the air with the property I'd suggest you leave it structured exactly as it is. This still entitles you to deduct costs associated with owning the property against the rental income. Costs may include interest, rates, insurance and maintenance. Be careful with the maintenance because capital expenditure on the property is not deductible as maintenance. Maintenance is really only the cost of making good on wear and tear caused by the tennants and doesn't include upgrading and improving the property. If you decide to buy again and retain this property as a permanent rental you may like to consider restructuring to ensure your debt funds the rental and your equity is in your home but you are clearly not at that stage yet. Keep it simple for now is probably the best bet.
Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.