Forum Replies Created
- Terryw wrote:Another potential option is to sell to a discretionary trust – but there are many disadvantages to this too.
A 3rd option is to speak to a tax advisor about setting up a LOC and borrowing to pay interest on the old PPOR – this is ineffect capitalising the interest on the loan and will free up more cash to pay down your new PPOR faster.
Which state is your house in? If VIC stamp duty may be exempt on the transfer from both to 1 names.
The properties are in Sydney – so I anticpate to pay stamp duty. I do not necessarily want to sell my current PPOR if I can avoid it to free funds to pay down the higher mortgage. If I do as I suggest above am I open to the ATO scrutiny?
Would the issue be with the funds I receive from my wife if I bought her share out (same the $325K)?
Or will it be her ability to claim on our PPOR when it becomes a IP – she works casually so she has the lower income between us?
Terryw wrote:Yes, you can look at borrowing to pay interest and other investment costs on your old PPOR. This will help you, only slightly though, by freeing up cash which you otherwise would have used so that it can go to the new PPOR loan. Please seek proper advice on this as it is not easy to implement without falling foul of the ATO.Is this what they call "debt recycling"?
Terryw wrote:CGT would also be applicable if it was initially an investment property.
Thanks Terry. Would CGT be payable when we transfer from PPOR to IP as well if we sell the IP sometime down the track?
Terryw wrote:Another option is for one spouse to borrow to buy out the other spouse. This will increase the borrowings and free up cash for the new place.
Thanks for the response. We are located in Sydney, so does that mean stamp duty will be applicable for the current PPOR. Title now is 50/50 with the wife.
The current PPOR was originally my wife's investment property 10 years ago. It was transferred into both our names about 3 years ago when we re-financed with another bank. Are there any CGT implications if we do this now?
Also just a general question if bank holds both properties as security would it affect me if had to finance (with the same bank) to "buy" my wife out on the current PPOR that will become a IP?
