The Bulletin --- Page: 58-59 : 10 April 2007 Original article by Michael Laurence
ABIX Summary
Many older Australians may sell the family home to shift to a smaller house. They may retire to a place in the country or near the beach. These people may like to consider two strategies, which give them some advantages. One strategy is to buy the next home before selling the family home. Under this strategy, the next property is rented out and negatively geared for a couple of years, before the householders move in. This strategy can give solid tax benefits for many years. The strategy of negatively gearing the second property gives tax benefits which can obliterate much of the tax on the current salary. The second strategy is to rent out the original family home before moving into the new home. The original home can be rented out for six years without the loss of its capital gains tax exempt status.
