All Topics / Help Needed! / Increasing IP Loan to pay down IP Line of Credit

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  • Profile photo of gems256gems256
    Participant
    @gems256
    Join Date: 2009
    Post Count: 3
    December 21, 2009 - 9:55 am

    Hello to all

    Help Needed!!

    I currently have an IP (400K) that was bought using a 70% Investment loan (280K) and the remaing 30% from a Line of credit (120K). The Line of credit was secured against my PPOR.

    I was thinking of reducing my LOC by increasing the investment loan by say 50K and using this money to bring down the LOC to say 70K. 

    Are there any Tax implications in this simple refinancing/consolidation process?

    I will probably use this available 50K in the LOC for my 2nd IP.

    Thanks 

     

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    December 22, 2009 - 9:44 am

    SHouldn't be an issue as you are just borrowing from one loan to pay back another – essentially a mini refinace.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    December 22, 2009 - 11:23 am

    No shouldnt be an issues at all.

    This is a structure we normally recommend to our clients so that they release the reliance on the PPOR as quickly as possible and shoft the debt burden to the individual IP's as soon as equity and increased valuation allows.

    Richard Taylor | Australia's leading private lender

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