Sorry to be the bearer of bad news but i think you may have an issue and probably need some rehashing of your structures.

Great in theory Refinance property B once it's become your PPoR and use the cash to pay Property A off completely, therefore making it for investment purposes and tax deductible. but it will not be acceptable to the ATO.

Depending on time frames there are a couple of alternative strategies to consider but they all come with a cost.

In saying this it may well be worth it in the long run and could well be viable to set up depending on the numbers.

For what you want to achieve the property should have been purchased as Tenants in Common and the additional funds should be placed in a high interest bearing account.

Jas

Sorry dont want to be picky but we want to utilise her available equity to improve her position for retirement.

This statement probably need more explanation that you may care to give on a public forum so feel free to email me if you need to. I am just trying to get a grasp on what the acquisition exercise needs to achieve as the resultant advice will be determined as often is the case by the eventual goal.

From what i am thinking you want to do a Family Pledge loan would not be appropriate.

Come back to me……

Deposit the funds in a nice high interest bearing account.

Rudi

If you would look down to the northern tip of the Gold Coast I can certainly recommend to you the best Accountant going around.

Steve Hodgkinson is my Accountant and is a partner at the Gold Business Group in Southport.

Has been for 12 years and acts for many other members on the forum here. Real speciality is property investors and structures.

Steve can be contacted on 55322855.

Tell him i referred as most good property accountants are not taking on new clients and you won't get past the receptionist.

We use a combination of Excel and Cashmanager which whilst being a glorified cash book is excellent for what it is.

Personally with the size of portfolio we have it is essential to have a decent back up otherwise come Tax time my Accountant has a fit but to give him the whole lot on a disc makes life easy.

Regretfully doesnt help me pay less Tax on the rental income but i guess thats always an issue on a Cash flow + portfolio.

JR

If you can go full doc then do so as dependant on the LVR you may find that the loan is mortgage insured if processed under a lodoc loan.

There are a few other disadvantages so push that route.

If they say NO then look for an alternative lender.

Dr S

Only way is for the vendor to agree to leave 5% plus your costs in the deal by way of a 2nd mortgage.

You agree to buy the property for say $340K but only pay say $323K on settlement with the balance paid over a period of time.
If you cannot fund your costs then you will need a little more left in.

The Bank would lend you the $323K being 95% and the Vendor provides funds for your costs (obviously if this is the case you would be settling on less than 95%).

I would be suprised the Vendor would agree to this given that it is a marraige breakup and would have thought both parties would want a clean settlement.

A rebate clause or early settlement payment is common practise on new land releases or off the plan contracts where the seller wishes to have some uniformity on his pricing and does not wish to show that there was some discounting of sales prices.
 
In saying this the amount rebated must be clearly displayed on the Contract or Special conditions page.

It sounds to me that your Buyer is trying to increase the sales price for his finance purpose without disclosing the true net amount to his lender.
 
Personally I would be walking away from such a transaction.

I guess i maybe old fashioned but i have always adopted a combination strategy of both.

When i started purchasing IP's some 10 years ago i decided to wrap many of them and then used the surplus cash flow to pay down debt on my properties I purchased for Capital Growth.

Now even the CG properties are of course cash flow positive and my debt gearing level is extremely low.

Just be careful in adopting Margaret Lomas finance ideals about having 1 big Line of Credit over all of your properties as you will experience consider problems down the track in uncrossing the securities and also a Line of credit is not a recommend loan structure for an IP or indeed a PPOR loan. Certainly it has a home but make sure your mortgage broker structures the loan correctly for you from the start.