What is Principal Place of Residence (PPOR)?

Most Australians purchase a home and live there for the rest of their lives. An increasing number of Australians purchase a home and move every ten to 15 years. A small group of Australians owns more than one home. They are investors or individuals who own a principal place of residence and at least one vacation home.

It’s important to declare a principal place of residence if you are an investor or owner of multiple residences for personal uses. The Australian taxation agencies use this information to determine your total tax bill on an annual basis.

A principal residence isn’t a furnished dwelling. It takes a few more requirements. Let’s take a look at them.

After you purchase the property, you must live in it two out of the five following years. Furnishing the dwelling and leaving it empty doesn’t count. The purchase was not an in-kind exchange in the last five years. There was no gain exclusion from a sale in the last two years from your taxes before the purchase of the current property.  

The Australian Taxation Office offers real estate investors several tax tools, such as negative gearing. The principal residence exemption isn’t one of them. All homeowners benefit from this exemption. Other methods to lower a tax bill exist.

Principal Place of Residence Conclusion

Contact our Mortgage House team to discuss funding your principal place of residence purchase. Gather more information by speaking with our loan specialists or using our online home loan calculator. They’ll help you get through the mortgage application process.