Oooh dear…
I own a property (out right minus $1) in Sydney.
Moved to Melbourne for work 5.5 year ago. Have not purchased any other property.I now want to purchase a property to live in in Melbourne but have all my equity in Sydney property.
Option 1; Sell Sydney property.
It’s a really bad time to sell at the moment…Option 2. and Question.
The banks will a Combined a loan (for both properties) so I can borrow value of Sydney property, place equity into residential property (Melb.) and be able to Negatively gear value of Sydney property.The ATO says that they dont like this….
Can you please help me as i need a home as we are about to have our first child and need a home.
Any solutions/ideas most appreciated.
Kind regards,
Marcusmars
You are right the ATO will disallow any deduction made on money used to buy a home. Even if borrowed against an IP.
Perhaps you can transfer title to your partner and she can borrow to buy it from you. She now has a loan for an IP in Sydney which is deductible and you have a pocketful of cash to buy a home with.
Just floating one idea here – there are several other ways to skin this cat.
This is why I always advise on the benefits of paying a ppor down via an offset account. You would be able to lift the funds from the offset and the original loan remains deductible.
All the best to you,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Originally posted by need_a_home:The banks will a Combined a loan (for both properties) so I can borrow value of Sydney property, place equity into residential property (Melb.) and be able to Negatively gear value of Sydney property.
Hi Marcus,
Be careful here; as the above sounds like the bank will take the 2 properties over the One loan (crosscolaterisation)Perhaps consider the following, assuming you intend to purchase further investments,
Loan 1
Step 1. Release max equity at 80% LVR secured against current property via a split loan.
Split A. P&I (20% deposit & closing costs for new PPR)
Split B. Interest only (investment loan)Loan 2
Step 2. New separate loan @ 80% LVR secured against new PPR, with a 100% offset linked to this loan.
The required 20% deposit and closing costs will come from split A in loan 1Step 3. place funds from split B loan 1 into the offset account linked to loan 2.
I hope this helps, Cheers.
Regards
Steven
Mortgage BrokerMobile Mortgage Market
Ph: 0402 483 216
[email protected]
http://www.mobilemortgagemarket.com.auPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
Further to Simon’s suggestion, you could also sell your home to a trust, the trust could borrow to buy from you creating a large deductible mortgage.
Terryw
Discover Home Loans
Parramatta
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
hi need_a_home
this is a little bit difficult because you need to talk to an accountant and yes there are lots of ways to skin this cat.
I will use a example so it is not advice but you need to talk to an accountant in melb or syd.
here goes
This person keeps the house in sydney they set up a company and a trust (hybrid maybe)
They draw the equity out of the syd house use a split loan with $1.00 in and the excess in the other section they lend that money to the company.
The company/trust perchases the property in melbourne and rents to a tennent the money advancer.
all must be set out, documented and formed correctly
It is a little more complicated then this but they are reasonably easy to setup.
also maybe have a chat with a local broker and advisor and get a few idea’s
This is not advice and should not be taken as suchhere to help
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