Buying an investment property is one of the smartest moves you can make to build long-term wealth. But what if your circumstances change and you want to move into your property?
It’s a common question we hear all the time: “Can I live in my investment property?”
The answer is yes, you can, but there are a few important rules, tax implications, and timing considerations to understand before you start packing the boxes.
Here’s everything you need to know about living in your investment property the right way.
1. You Can Live There, But It Changes the Rules
There’s no law stopping you from living in a property you own, even if it started as an investment.
However, when you move in, it changes how your property is treated for tax and loan purposes.
Here’s what typically happens:
- You’ll no longer be earning rental income.
- You lose access to investment deductions like interest, maintenance, and depreciation.
- When you sell, Capital Gains Tax (CGT) will apply differently depending on how long it was rented out versus occupied.
Tip: Always keep clear records of when you switch from renting it out to living in it; it’s crucial for future tax calculations.
2. Know the Six-Year Rule
The ATO’s six-year rule can actually work in your favour.
If your property was once your main residence and you later rented it out, you can treat it as your home for up to six years while it earns rental income and still avoid paying CGT.
If you’re moving into a property that started as an investment, you may be eligible for a partial exemption, depending on the time split between renting and living.
This rule can be a game-changer, so it’s worth getting tailored advice from your accountant.
3. Notify Your Lender
If you plan to live in your investment property full-time, you’ll need to update your loan type from an investment loan to an owner-occupier loan.
Why? Because:
- Owner-occupier loans generally have lower interest rates, saving you money.
- Your lender must have the correct information to stay compliant with lending terms.
A simple phone call to your bank or broker will do the trick, and it could mean hundreds saved every month.
4. Short-Term Stays Have Short-Term Impacts
If you plan to live in your investment property temporarily, say, between tenants, while renovating, or testing the area, that’s perfectly fine.
But remember:
- You can’t claim rental deductions while you’re living there.
- Your accountant will need to split your expenses and CGT based on how long it was rented vs. owner-occupied.
Even a short stay can have long-term tax implications, so it’s worth keeping track of dates.
5. Consider Your Bigger Picture
Before you move in, ask yourself:
– Does this fit my property strategy?
– Will it affect my ability to grow my portfolio?
– Am I giving up rental income or equity-building potential?
Sometimes, living in your investment property can make perfect sense, for example, if you’re renovating to increase its value or your personal situation has shifted.
Other times, staying put and letting it grow in value might be the smarter move.
At Parata Property, we help everyday Australians weigh up both sides, so you can make decisions that serve your long-term freedom, not just your short-term comfort.
6. The Bottom Line
Yes, you can live in your investment property, but you need to play by the rules.
That means understanding the tax implications, updating your loan type, and planning strategically for your future portfolio growth.
With the right advice, you can enjoy the home you invested in while still protecting your long-term financial goals.
Ready to plan your next move?
Whether you’re thinking of living in your investment property or scaling to your next one, our team can help you make it happen strategically.
Book a call with Parata Property