r/AusFinance • u/Slyxxer • 12h ago
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u/austhrowaway91919 12h ago
This is peak opportunity cost. The house is perfect, but renting it out for 10-15yrs (and the hassle of being a landlord / maintaining the place) might be silly.
Also, stairs aren't the end of the world for a 60-70yr old. They are by 70+ perhaps. Do you really want to invest every dollar you have now into a house you think you'll need in 30yrs time?
Personally, unless you can buy and move now - I'd skip it. Enjoy your lifestyle now, buy and move when it makes sense.
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u/OkCaptain1684 12h ago
I am assuming they have some kind of injury already, because 50-55 would be too young for mobility issues.
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u/austhrowaway91919 12h ago
That's what I get for skim reading.
I guess we really need to know why they cannot move, as it affects why they'd buy and stay in statsis for 15yrs, or wait until they're ready to move/buy.
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u/Slyxxer 11h ago
I have a pet alpaca that wouldn't be allowed at the new house 🦙🤣
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u/austhrowaway91919 11h ago edited 10h ago
Well, that absolutely covers the "live for the lifestyle now" 😁
I think you've gotten enough decent advice, the next part is to look at specific financial pros/cons for the move.
E.g. 1) Buying a second house in the same market/area is risky, but if you're buying it to live you're probably fine with that 2) Does renting the property provide any beneficial tax breaks for an eventual PPOR? E.g. Debt recycling your PPOR mortgage into a tax deductible investment loan, buying renovations and depreciating them over the next 15yrs (e.g. new kitchen/bathroom being tax beneficial when done as a rental) etc. 3) Opportunity cost: what would buying in 10-15yrs look like instead?
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u/yohaneh 12h ago
i want to see the alpaca. don't have any strong opinion on the housing situation but i want to see the alpaca.
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u/Slyxxer 12h ago
He sleeps upstairs and we go swimming at the beach in summer!
His insta is
@alfie_the_alpaca_in_adelaide
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u/underscore_hashtags 11h ago
You could also consider having an elevator added to your current home ($35-65k roughly) and stay there. You are in a fantastic financial situation, If you love our home, just stay there and re-evaluate in 20-25 years when you might be considering retirement villages and not such an independent lfestyle.
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u/Scotsman34 9h ago
Agree with this, a lift is a good suggestion. Not as expensive as you would think and given the situation probably cheaper and less risk/hassle than managing multiple properties for xx years. Lots of options that lift from the bottom so less needed to get one installed/up and running. Grandparents put one in, sounds like similar situation to you didn’t want to move so made sense. Consider if you think wheelchair access is going to be needed later on. If so then widening halls while putting in a lift is the smart route.
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u/AlwaysAirCooled-1979 12h ago
I’d sell my place and move it to it now. If it’s close to where you are, work commute isn’t an issue. And you’d be mortgage free, build up super and investments
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u/Slyxxer 12h ago
That would be ideal but unfortunately we can't move for a while.
I have a pet alpaca (in suburbia) that got grandfathered in when the planning laws changed, and he wouldn't be approved in the new place.
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u/Sumojuz 12h ago
Wtf way to bury the lede, tell us more about this alpaca.
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u/eutrapalicon 12h ago
Really buried it, the explanation for not moving is the best part of the post.
Also, current home if the kitchen and a bedroom are on the ground floor then the current house may be suitable for longer than they expect.
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u/AlwaysAirCooled-1979 12h ago
In that case, talk to a broker and see if you can afford the loan for an investment property. If it’s your dream home, I’d go for it. If finances allow
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u/dxdx_ 12h ago
I say buy now.
Things might be tight for 5 years until the rent rises above the mortgage, then you’ll be exactly where you are now financially, but you’ll have your retirement home secured.
Re: CGT, it won’t really matter if you’re planning to die in the place and never sell. When the time comes, you sell your current PPOR, move into and pay out the retirement house and likely have a tidy little tax free profit to retire with.
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u/emkateau 12h ago
I would look into the tax rules around the place and see whether that impacts your decision. You could be paying a lot more tax.
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u/jokuda-au 11h ago
Worth running the numbers on what the rent actually covers. Borrowing most of $1m against a rental for 10-15 years is a lot of holding cost and landlord hassle for a house that might not suit you exactly at 55 anyway. Also family sales can get awkward if anything goes wrong with the place.
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u/Slyxxer 11h ago
It would be tight but doable. Total repayments would be
50% gross income (without rent)
32% gross income (with rent)
We're very lucky to be DINKs with a somewhat modest lifestyle (we don't worry about money because our lifestyle is well within our means) so we would have to cut back on luxuries but that's about it.
Also only considering it because we know the house (it's the parents place) and would be happy to buy it sight unseen.
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u/Ndrau 4h ago
We've spent the last thirty years making housing an investment. It's gone from a long term average of 4x average salary to ~11x. Recent changes to CGT are aimed at reversing that. How does the world look in 30 years if we get back to 4x average?
Given you've got an Alpaca, I'm assuming no big health issues that should impact the next thirty years. Depending on when you decide to slowdown you have 15-25 years of high HHI.
If both properties were $360k.. would you race to lock in the address? In looking for the perfect retirement property... if in 25 years time there was a new build going for $400k, would you rather that or the family member's house that'll be 25 years older than it is now?
Live your life, you're already in a fantastic position. If you think property is a good investment, go for it. If you think Super and ETFs might be better with the tide turning on property let it be. Make retirement decisions closer to retirement... if you're in a bad position at 60-65 then SINKs with lower income are likely to be far worse..
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u/amish__ 11h ago
What's the rest of your financial position look like?
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u/Slyxxer 10h ago
Copypasta from another reply 🙂
It would be tight but doable. Total repayments on both houses would be
50% gross income (without rent)
32% gross income (with rent)
We're very lucky to be DINKs with a somewhat modest lifestyle.
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u/TransportationIcy104 11h ago
I wouldn't buy - its hard enough working out if a place will be 'perfect' for you in 12 months, let alone 10-15 years.
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u/AutisticBells 9h ago
No advice sorry, just have to mention that edit is the funniest thing I've seen on here.
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u/Glad-Menu-2625 7h ago
When you say 10-15 years, are you waiting until your pac man crosses the rainbow bridge?
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u/Slyxxer 7h ago
Spot on.
PacPac has retrospective approval here, but council have mentioned approval doesn't carry if we move and would be highly unlikely.
We've had him for 8yrs and he's been with us through some tough times. He's family ❤️
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u/Glad-Menu-2625 29m ago
I finally checked out the gram and he is delightful. Just a big fluffy puppy 😉 Shame about the council. Did you get him as a cria?
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u/VIFASIS 7h ago
What about an elevator in your current home? You'd be surprised how space efficient they can be
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u/Slyxxer 5h ago
Definitely worth consideration, I didn't even know it was something you could retrofit around an existing house.
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u/sql-join-master 2h ago
My grandma just got one installed in her house. I’ve been told the number, and I forget it, but it was much cheaper than I was expecting
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u/KaigeKrysin 2h ago
I love that a alpaca is the reason hahah. Housing could change a lot between now and then, I would just wait. Worst case scenario as part of "downsizing" you can sacrifice some space for a elevator if there's nothing around when the time comes.
Edit: also going to put it out there, stamp duty exists, who knows maybe that will change in the future for SA. I'd bet adding a lift costs a lot less than stamp duty on the new place!
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u/Wonderful_Singer1255 1h ago
I didnt expect alpaca to be the plot twist in a finance post but here we are
stamp duty alone makes my head hurt just thinking about it. that plus having basically two mortgages for a house you cant even use yet… seems like a lot of headache for something 15 years away. your current spot sounds amazing too, 2km from beach and close to shops is pretty rare
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u/hokage_82 12h ago
Are kids not part or the plan yet or period ?
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u/Slyxxer 12h ago
No kids period, but I have an pet alpaca that wouldn't be approved in the new place.
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u/hokage_82 12h ago
If that’s the case live it up as YOLO. No need to leave anything behind for scavengers.
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u/Termsandconditionsch 11h ago
My dad moved his bedroom downstairs this year and he’s 88, I’d say you have plenty of time if you are still in your 40s. Even if everyone isn’t like that you still have at a minimum 15-20 years before it becomes an issue.
Probably. Assuming that you are otherwise healthy.
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u/Slyxxer 11h ago
Moving bedrooms is something I never considered TBH.
Our downstairs is open plan living/dining, but now you mention it, we do have a double garage that could be converted to a bedroom. No shower downstairs though, but definitely food for thought.
Thank you!
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u/Termsandconditionsch 10h ago
No worries.
It’s definitely an option. I’m roughly the same age as you and will be considering this for when we move to what will hopefully be our forever home sometime next year.
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u/Protoavis 10h ago
Look into the cost of selling/buying/stamp duty/etc vs fitting out current house to be viable (eg moving rooms/elevator/etc) chances are it's probably cheaper to stay with some renovations. Really just becomes a question of do you prefer the other house and it's location over your current house, if no just modify the existing house to work......being multi level doesn't exclude it automatically for mobility issues, I mean there's a lot of people the world over in wheelchairs living in multilevel homes, just have to modifying the house a bit to accommodate.
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u/twostonebird 11h ago
You don't know anything about their health and ability, why would you feel the need to tell them how to live their lives? They said they know they won't be able to do stairs from early in life, how is your dad at all relevant to this conversation?
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u/Termsandconditionsch 10h ago
And neither do you?
I read it as “pretty much everyone will have mobility issues later in life and we know that it will become an issue”.
Might want to do something about your anger issues.
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u/twostonebird 10h ago
Im not angry, just pointing out your presumptuous attitude and ableism. Love that you made presumptions about my emotions when you responded though, very on brand
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u/ThanksNo3378 10h ago
I just can’t process in my brain prioritising an alpaca for my life decisions but good on you for doing so
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u/AIGenerated00 6h ago edited 5h ago
It is incredibly tempting to lock down the perfect retirement home right now, especially when it keeps wealth in the family. However, buying a property 15 years before you actually need to live in it was already an expensive way to solve a future problem—and under the newly legislated tax laws, it is a catastrophic cash flow trap.
Here is the complete financial reality of holding that property under the new rules, and the much smarter alternatives you have right where you are.
The Impact of the New Tax Laws
The May 2026 Federal Budget fundamentally altered property investing, and your scenario falls directly into the crosshairs of the new restrictions.
Because your family member's home is an "established dwelling" and you would be purchasing it after the May 12, 2026 transitional cut-off, you will lose the ability to offset your rental losses against your salary starting July 1, 2027.
Instead of a yearly tax refund, those losses are "quarantined" and can only be carried forward to offset future residential property income or capital gains. Since your goal is to eventually move into this home to retire—not to build a rental empire or flip it for a profit—those carried-forward tax losses will essentially sit unused. You will suffer the full cash flow drain for 15 years without actually recouping the tax benefit against your primary income.
Additionally, the 50% Capital Gains Tax (CGT) discount is being replaced from July 1, 2027, with cost-base indexation and a minimum 30% tax rate on capital gains. If your plans changed and you were forced to sell before moving in, you would likely face a significantly higher tax burden on the sale.
The Cash Flow Reality
Without negative gearing to subsidize your loan, you will be funding the shortfall entirely with your after-tax income. Assuming you borrow the purchase price plus stamp duty using equity from your current home, here is your estimated reality from July 2027 onward:
Expense / Income
Estimated Annual Amount
New Loan Amount
~$1,055,000 (Purchase + Vic Stamp Duty)
Interest (at 6.5% Investment Rate)
-$68,575
Holding Costs (Rates, Insurance, Maintenance)
-$8,000
Rental Income (Assuming 3.5% yield / $670/wk)
+$35,000
Pre-Tax Shortfall
-$41,575
Tax Refund Against Salary (New Rules)
$0 (Quarantined)
Actual Out-of-Pocket Drain
-$41,575 / year (~$3,464 / month)
You will be hemorrhaging roughly $3,464 a month just to hold onto the idea of a future home, without paying down the principal. Over 15 years, that is over $620,000 in dead money.
Furthermore, over a decade and a half of renters, the house will suffer significant wear and tear. By the time you are 55 and ready to move in, you will likely need to spend an additional $100k to $150k renovating the 15-year-old kitchen, dated bathrooms, and battered floors before it actually feels like your pristine retirement home.
The Better Path: Adapting Your Current Home
You already live in a perfect location with an easily manageable $200k mortgage. Rather than taking on massive, un-deductible debt, adapting your current house is the most profitable and stress-free solution. You have two highly viable ways to do this:
1. The Downstairs Bedroom Conversion By shifting your living space to the ground floor when the time comes, you entirely avoid the stress of moving or managing an investment property. To make this work, your home needs to pass a basic floorplan test:
The Full Bathroom: If you only have a powder room downstairs, you will need to add a shower. Expanding a powder room or stealing space from a laundry typically costs between $15,000 and $30,000.
The Bedroom Space: A formal dining room, large study, or separate media room can easily be converted into a master suite by adding doors and built-in wardrobes.
Accessibility: Ensure your downstairs doorways and hallways are wide enough for future mobility aids, and check that there are no sunken living rooms or internal steps.
Managing the Upstairs: As DINKs, you can simply shut the doors to the second storey, turn off the upstairs climate control, and treat it as a self-contained guest wing for when family visits.
2. The Residential Elevator If your floorplan doesn't allow for a downstairs master suite, you can simply bypass the stairs. Installing a high-end domestic residential elevator costs between $45,000 and $65,000. That is less than two years of the out-of-pocket costs to hold the rental property under the new tax laws, allowing you to access your entire home indefinitely.
The Financial Upside
The math heavily favors staying put. Spending $30,000 to $50,000 to knock down a wall and install a walk-in shower—or even $65,000 for a lift—is pocket change compared to the $620,000+ you would lose subsidizing a negatively geared rental property without tax relief.
If you take that exact $3,464/month shortfall and put it into a low-cost ETF for 15 years instead, assuming a historical 7% return, you would build a liquid portfolio worth over $1.08 million. You can aggressively pay off your remaining $200k mortgage, invest your surplus cash, adapt the house you already love, and retire exceptionally wealthy.
Not financial advice*
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u/Slyxxer 6h ago
Thank you so much for taking the time to explain this in a way that's simple enough for me to understand. I really appreciate it ❤️
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u/Dry_Kangaroo_1234 6h ago
It’s AI slop lol. You can’t negative gear anymore.
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u/AIGenerated00 6h ago
It’s AI slop but generated by a human. You can absolutely negative gear but only against the property and not against other income.
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u/Dry_Kangaroo_1234 6h ago
What you said makes no sense. What income are you claiming the $41,000 shortfall against? You can’t claim ANY of that $41,000. It can only be rolled forward.
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u/AIGenerated00 6h ago
Against rental income, and property expenses, taxes, you can
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u/Dry_Kangaroo_1234 6h ago
Dude. You calculated costs at $68,000 + $8,000, and then deducted the $35,000 rental income, leaving a $41,000 shortfall.
SHORTFALL. The rental income has already been factored in.
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u/AIGenerated00 5h ago
I have updated the numbers. It’s even worse if you bought the other property.
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u/AIGenerated00 6h ago
Cheers, got Google Gemini AI to generate this. Not financial advice.
Everyone uses AI but are hypocritical in their condemnation of it. I for one, welcome our AI overlords.
#Samaritan
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u/MeatSuzuki 11h ago
Good lord, rehomed the alpaca.
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