Gday good people! My wife and I recently purchased a property using equity from our other investment properties. This is all tax deductible
So if we move into this new property what are the tax implication ? We are renting it out for a while. Hiya Chris
Any loans that were used to finance the IP that you now live in won't be deductible.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
You cannot proportion the deduction ?
Hi again
When you say you used equity from your other investment properties – did you set this equity release up as a separate loan?
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
No not separate loans so i guess that means no
Just increased the loan amountsIdeally that equity release should have been set up separately so in an event like this you can clearly define what proportion of the debt is deductible and which isn't. You'll need to talk with an accountant about the possibly of apportioning it.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Unfortunately it becomes a mixed purpose loan now and is not the most efficient way of doing things. I dare say you can claim interest proportionally but as Jamie mentioned, see your accountant to confirm.
Cheers
Tom
Not a good move.
This will result in a mixed purpose loan and you will not be able to pay down this debt, when it becomes non deductible, independently of the investment loans. i.e. each repayment of principal must come off the investment portions as well. Obviously this is going to result in more tax payable and less non deductible interest.
You need to seek advice and then refinance to fix this up.
Also this property will always be subject to CGT based on a time basis – portion of time it was rented out.
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
So if we move into this new property what are the tax implication ? We are renting it out for a while. 
Just increased the loan amounts
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