Hi all,
Im seeking opinions on the following scenario
– 2 properties owned with capital value of $740,000.Outstanding debt = $180,000.
– Both properties are being used residentially and not being rented out.1 recent property puchased worth $600,000 with the view to jointly live in. Approval has been granted for finance to cover new property.
Given limited tax advantage on outstanding debt of properties available for rent (rather than the newly purchased home), the thought is to sell both older properties, purchase new property outright, and re-enter property market when a suitable investment property is found. Current joint income is >$180K.
What would you do ????
thanks for your time
Scoops
Hi Scoops,
In the main I am a ‘buy and holder’ and would normally say don’t sell – however in your case this may be the best course of action both in the short and long term.
Using the figures quoted you walk away from the sale of the two properties with $560 less costs and CGT if applicable. Is there any CGT payable?
If all of these funds are used to pay down the new home this will leave a non-deductible loan of $100K (give or take a bit).
Then set up an equity loan or similar using the available investible equity of $380K and use this money for deposits on other properties.
Derek
[email protected]Property Investment Support Available.
Have you thought about setting up a trust and putting your two existing properties into it? You will have to pay CGT and stamp duty, but it may be a better option than searching for other equally as good investments.
Thanks,
Luckyone
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