17 Oct 2021

What is Principal Place of Residence (PPOR)?

The typical homeowner owns one house. On their taxes, they declare it as their principal place of residence (PPOR) without thinking twice. It’s different for those who own more than one property or invest in several.

Any Australian housing market property owned by one person becomes eligible for the capital gains tax. Thus, it’s important to designate one of them as your principal residence. In addition, the property must meet some criteria to qualify as a PPOR.

In Australia, the Taxation Office outlines criteria. For example, the homeowner, their family, and their spouse must solely own property and live in it the entire fiscal year. The PPOR property does not produce income for the owner. 

A business does not reside at the address. Nor did the owner flip it for a profit. The ATO adds a size requirement. Your PPOR cannot span more than two hectares.

These rules keep the spirit of the capital gain tax exemption pure. If a property doesn’t qualify for the PPOR exemption, there are others. After owning a property for 12 consecutive months, Australians qualify for a 50% discount on the capital gains tax. 

To find other discounts, exemptions, and write-offs, consult with a tax accountant and attorney. The professionals can steer you in the right direction for your financial circumstances.

Principal Place of Residence Conclusion

It’s important to establish your principal place of residence for Australian tax purposes. Investors find it tricky when they own several properties. In terms of financing investment properties, Mortgage House is available to discuss your goals. Contact our loan specialists.

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