I am only new to investing, so still a lot to learn.
If I was to rent out my current PPOR, and move and buy elsewhere. It's not as simple as borrowing the equity to pay out my new home is it? Therefore turning my current PPOR into an investment property with claimability.
Can someone explain this to me please?
No. Deductibility is determined by what the funds borrowed for a used for.
In this case you will be withdrawing equity = borrowing to buy a new owner occupied house. So the interest on these funds will not be deductible.
There are options to help you increase deductions though and this includes borrowing for all expneses on the old PPOR (eg rates, insurance etc) and even capitalising the interest on this – ie borrowing to pay interest. This needs to be carefully planning with a tax expert, or may not pass muster with the ATO.
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
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