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- ambosh wrote:Im not sure exactly what you mean on the tax side, but I would refinance all three properties so that the majority of your debt sits on the investment properties. Debt on your PPOR is not deductible, so it is in your interests to reduce this to the lowest amount possible, using the equity in your IPs. Refinancing is the best way to achieve this and is allowed for tax purposes. I think this is probably what you were asking!?
Yes increasing the amount of interest which is deductible is the end result I'm after but I didn't think simply refiancinig the IP's to pay off some part of the PPOR mortgage would work because there is the question of what purpose the money is borrowed for.
I thought that by buying a 50% share in each others IPs the money could genuinely be said to have been borrowed for the IPs.
Although if stamp duty is applicalbe I'll have to consider whether stamp duty will cancel out the savings from deducting interest.Also another think I thought of is that my wife's IP has been rented for 4 years now so If I bought 50% she would be up for CGT for 50% of the value. (mine has just changed from our PPOR to an IP)…
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