I am thinking about renting out two rooms in my home for Airbnb. I've had conflicting information about my NSW land tax position. Can you clarify?
A spokesperson for the NSW Office of State Revenue tells me that properties that are not owner-occupied or owned by a company or a trust are generally liable for land tax. This would include any property used for Airbnb rental purposes that is not occupied by the owner as their residence.
An owner is exempt from land tax if the property is used as the owner's Principal Place of Residence (PPR). If the owner decides to use part of his residence for Airbnb rentals the exemption will continue to apply if the following conditions are met:
1. the whole property is rented as an Airbnb rental as long as in any calendar year this usage is less than 182 days. For example, where an owner rents their PPR for a period over summer the PPR exemption continues as long as after the rental they recommence to use the property as their PPR.
2. no more than two rooms within the house are occupied under separate agreements for Airbnb rental purposes or if the property contains a separate flat which is used for Airbnb purposes.
Where the usage of the property for Airbnb rentals exceeds the allowed occupancies of a flat or two rooms, and these areas are permanently set aside for use for Airbnb purposes, the property may become liable for land tax.
The liable portion of the property is based on the area of the buildings on the property used for the Airbnb rental purposes as a percentage of the total area of buildings on the property. However, not all land owners in this situation would automatically pay land tax in any given year as this depends on the land value of the liable portion of their property and if they own other liable land.
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.
Can you please clarify at what stage pensionable age is being increased?
From July 1, 2017, the qualifying age for the age pension will start to gradually increase by six months every two years until it reaches 67 in 2023. This change will affect people born after July 1, 1952, as they plan for their retirement.
I try to teach the kids the value of regular savings, and they have had a CommBank Youthsaver account for years. It pays some bonus interest each month when there is no withdrawal. CBA just introduced a new one deposit rule - the kids lose all interest if they make more than one deposit each month.This will disillusion my 14-year-old son who is doing odd jobs, depositing three times a month, and getting excited about watching his balance grow. Is this just another casualty in the bank world of profits?
CBA has confirmed that customers can make as many deposits as they like into the account as part of the terms relating to bonus interest payments on a Youthsaver account. The only way to lose interest for the month is to make no deposit.
Anybody who wishes to discuss the Youthsaver account can contact CBA on 13 2221, 24 hours a day, seven days a week.
My wife (67) and I (81) are trustees of our self-managed super fund, which is in pension mode. The balance in her name is $1,888,000 and the balance in my name is $375,000. With the recent super rules and the transfer balance cap of $1.6 million could you please comment on my strategy to comply with the rules.
Before June 30, 2017, can my wife draw down $300,000 from her account and place it in a joint bank account outside the SMSF. Later, can she give me $300,000 to start a new account based pension in my name within the SMSF? If you have an alternative strategy to avoid creating a separate account in the accumulation phase I would be very grateful.
Your wife will be required to withdraw about $300,000 from the fund to bring her balance down to $1.6 million at June 30, and she can certainly deposit this in a bank account. However, as you are aged 81, you can no longer contribute to super. This need not be a problem as you can earn $18,200 a year without paying tax - based on the information you have given this could be safely held in a bank account without incurring any income tax.
Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. Email: asknoel@fairfaxmedia.com.au.
