All Topics / Help Needed! / CGT on refinancing investment property?

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  • Profile photo of yotoshiyotoshi
    Member
    @yotoshi
    Join Date: 2010
    Post Count: 2
    September 12, 2010 - 10:52 am

    Hi all, I have a situation where I'm not too sure who is right.

    I currenty have an IP which I bought for $200K in 2000 and is currently valued @ $350K.

    Now I would like to use the equity in my IP to purchase my second IP but I was told by 2 banks that if I do use the equity I will be charged CGT on that particular property and that they will not do the finance for me.

    I than spoke to a mortgage broker and said I can get the finance without having to worry about any CGT.

    Is someone able to tell me who is right? and why won't the bank let me refinance to purchase another IP?

    Thanks Andrew.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    September 12, 2010 - 11:43 am

    Hi Andrew

    Absolutely amazing the answers you get from some Bankers.

    I assure there is NO CGT liability in assessing the equity in your IP.

    This would only be triggered in the event that the property was sold or transferred.

    Richard Taylor | Australia's leading private lender

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    September 12, 2010 - 9:34 pm
    yotoshi wrote:
    Hi all, I have a situation where I'm not too sure who is right.

    I currenty have an IP which I bought for $200K in 2000 and is currently valued @ $350K.

    Now I would like to use the equity in my IP to purchase my second IP but I was told by 2 banks that if I do use the equity I will be charged CGT on that particular property and that they will not do the finance for me.

    I than spoke to a mortgage broker and said I can get the finance without having to worry about any CGT.

    Is someone able to tell me who is right? and why won't the bank let me refinance to purchase another IP?

    Thanks Andrew.

    bank staff frequently give out wrong tax advice.

    ask them how could you be charged captial gains tax on borrowings. Lucky you had the good sense on checking this. Imagine how many people would have beleived them and simply given up the idea of investing

    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 yotoshiyotoshi
    Member
    @yotoshi
    Join Date: 2010
    Post Count: 2
    September 13, 2010 - 2:45 am

    Thanks for the help guys!

    Makes a lot of sense now!

    Looks like second IP it is!

Viewing 4 posts - 1 through 4 (of 4 total)

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