Hi Forum Members, I hope you are all well.
Could you accounting / finance people please assist me with my current scenario.
I have an investment property that is valued at around $300,000 and has a remaining mortgage of around $15,000 on it.
I have another property as my PPOR which is valued at around $350,000 which I owe around $200,000. With this PPOR property I cannot claim my interest deductions.
I am considerind alternatives to refinance the loans so that the whole of the debt is for the Investment property and therefore being able to claim the entire interest as a tax deduction.
Can this be done ? and how does the Australian Taxation Office view this transaction ?
Any comments would be greatly appreciated.
Thanking you in advance.Cannot be done.
you could consider selling the IP, using the proceeds to pay down the PPOR, and then borrowing against this to buy another IP. But then you have all the associated costs: Stamp duty, CGT, RE fees etc. (Or you could sell to your trust).
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
would it be possible (or worthwhile) for Leo to refinance or convert the IP loan to IO, and use the tax deduction and income from the IP to pay down the PPOR, even though the interest payments on 15K would not be that large.
Would this be preferable to paying down the IP and losing the deduction?
this way there would be no need to sell.am I correct in saying that it would be better to have initially financed the IP as IO and paid down the PPOR first?
regards
Fixit.
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