get some tax advice, you might have to make a family trust election to be able to carry forward the loss.

If it is being held on capital account then your accountant is correct. You cannot claim the main residence exemption under after it becomes the main residence.

I think it could be worse. The main residence exemption doesn’t apply where the property is held on revenue account even if you were living in it. Your intention at purchase was to buy build and sell and you took actions in this regard.

There is also no 50% cgt discount in these situations.

Also considered GST?

How you would do it is to borrow 80 or 90% of the new property and for the remaining costs you would set up a new loan against your main residence.

It’s one way of doing it but there are others. You could just sign the contract yourself, appoint them as your agent or they could act as your nominee.

You would want to restrict it to a specific property and amount.

Why do you want to give them a POA?

I am not sure what you are asking but if you mean out down a 10% deposit by borrowing against other property then lmi will apply in most cases.

The second option would likely involve paying LMI. No point in paying this if your serviceability will run out before your equity.
.

If serviceability later improves you can always borrow against these properties further and incur lmi then if need be.

Probably would be deductible if your intention was to rent it at end of Reno’s. See Steele’s case.

Very interesting Benny.

This is the first time that I had heard of this so I just made a spreadsheet to test it out and I got similar results. Very interesting.

My results were
$1 double 20 times becomes $1,048,576.

$1 doubles 20 times with 30% tax on the income component becomes $40,642

It all depends. Cgt may not apply and you may be taxed as income under some situations.

No need for a valuation unless it was your main residence.

All holding expenses could be claimed in some circumstances while you are holding and renovating even though you are not advertising for rent but only where you intend to rent it out after finishing.

Disregard whatever value an agent attributes the property for 2 reasons – a) they will exaggerate to get a listing and b) they are not valuers.

I would suggest you get a valuation done.

Not much else you can do.

Seek some tax advice on generating a capital loss and the ability to keep claiming the interest on the loan after the property is gone.

If your other properties are mortgaged to the same bank you have the risk of all monies clauses whereby you would have pledged these as security for all loans with the bank.

Best to…[Read more]

THe trouble you will face is that many if not most lenders will use the same mortgage insurer.

The bank won’t release the mortgage on the property unless what they are owed in full is paid. That will mean you can sell the property but won’t be able to settle unless you can either come up with the shortfall or convince them to lend you the money to pay them back.

Do you own any other assets?

Say your current PPOR loan is $250,000 and you have $150,000 in the offset and need $75,000.
This is what you would do:

Split the current $250,000 loan into 2 portions
a) $175,000
b) $75,000

Once split pay the $75,000 from the offset into loan b). Make sure your lender won’t close the loan though. You might have to leave $100 outstanding.

Then…[Read more]

It is certainly worth considering. There may be arguments for and against fixing though.

If your interest rate is 5% and you use the offset account money you will have to pay an extra $3,750 in interest per year and this would not be deducitble.

If you paid $75k off your main residence debt and reborrowed it you might pay the same interest but would now have an extra $3,750 in deductions each year. that might mean $1,800 extra in…[Read more]

Not enought informaton to answer, but possibly exempt. But the existing house would then be subject to CGT.

I think they should make things harder for those buying their second and subsequent properties. Tighter lending as well as land tax and perhaps scaling back the CGT and negative gearing benefits will help this. Increasing RBA interest rates will too, but this will hurt owner occupiers.