Hi All,
I have a problem, the situation is this.
– current PPOR valued 500k unencumbered
– looking to buy new PPOR valued 750
– don't want to lose the existing PPOR, prefer to convert to IPOptions:
1. Sell existing PPOR, use the cash as a big deposit on new PPOR reducing required loan amount. We would prefer not to sell the existing place as its in a good area and we think it has potential.
2. Put renters in the existing PPOR, use the rental income minus tax to help with the mortgage payments on the new PPOR.
3. Sell/Transfer existing PPOR to a Family Trust/Company which we own, I think in this situation Trust would need to get an IO loan from bank, we then can use the funds from the sale to help purchase new PPOR. Put renters in the new IP owned by trust, make the difference in repayments and benefit from the Negative Geared property.
If anyone has any suggestions would be appreciated.
CLoSeR
Closer,
Selling the property to a Family Trust wont help you claim the negative gearing deductions as losses are closetted within the Trust itself.You would be better off to sell the property to a Unit Trust structure with you holding the Units.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Richard,
So your saying that if a Unit Trust structure is used, we should be able to claim negative gearing deductions?
The next question is how difficult is it to get a loan for a trust, Ive heard the major banks will either refuse or send you to their business banking dept which incur higher fees and rates.
CLoSeR
Hi Closer
Yes done correctly the Unit holder can claim the negative gearing deductions.
I have done hundreds of such transactions for forum clients over the years.
With the right lender and structured correctly you wont have an issue in borrowing in the Trust name with a competitive rate and set up cost.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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