Forum Replies Created
- JacM wrote:Actually it could be deductible. Read this:
https://www.propertyinvesting.com/forums/property-investing/help-needed/4335481
Yes I can see how the loan can remain to the current PPR when it is converted to an IP. However in your case Jac (and mine and most other people!) you have paid all the principle off so you are stuck with an asset you cant borrow against. I am happy with that as I do not want to sacrifice my home for the sake of investing. If for some reason there is a problem with your investment, you will not potentially lose everything youve got.
After reading that thread I am interested to see what you strategy will be to move into a new PPR. It seems like that only way is to sell and start borrowing….hmmmm.
The ATO look at what was the reason for the original loan? Was it for the purchase of an IP our for a PPR? As far as I know, once its for a PPR you will have a hard time proving that its an IP cost. There some obvious indicatorslike what property is the loan mortgaged against? If its the PPR, watch out if the ATO decide to have a look at you.
But dont take my word for it.. You better talk to your tax agent.
1. I dont think you can deduct the 136 K interest as it is against your current PPR even though the loan was for your IP.
2. If you move, the house would then become your PPR and the interest on that not deductible.So the question really should be how much do you want to incur in non deductible interest.
I would stay in the unit
Hi Jac yes they are on separate titles. They were built in the early 80's'. It must not have been a requirement back then for them to be separately metered….
Yes you are right on the money. The other ownersdont want the up front cost. However there is a saving for them in that the water is equally charged to all the unitsso those who use less than thier share are being unfairly charged. As there is 6 people in my unit, all the others are paying for thier showers! But even taking this into account, the payback period for them is several years.
Ah maybe thats it – The tax is on the "unimproved" value. If that is correct I can see the original value would have been lower than this but what if its on the total value?
A word of warning – It is my understanding that if you rent out your PPR the interest on the loan for that property will not be tax deductible if it was originally purchased to reside in.
