Hi Wilko,

The ATO has indicated in a few publications that a spouse borrowing to buy the interest of another spouse can claim the interest where the property is or will be an investment property.

But it is easy to get this wrong and not be able to claim the interest. There is a thread on another forum in which the poster was boasting how they did this – but his spouse had gifted her share of the property to him. You cannot borrow to ‘buy’ a gift and claim the interest!

Only lawyers can advise on structures. Accountants can only advise on the tax aspects. A trust is a pure legal thing – person A promising to hold property for person B under whole bunch of conditions stipulated in a deed.

No minimum time period is specified in the legislation. Must genuniely make the property your main residence.

It all depends on the circumstances. Borrowing costs are generally deductible over 5 years but if the LMI is incurred on a PPOR secured loan which is increased to access the equity for possible future purchases then it possibly won't be deductible.

Normal situation applies. If the expense of rent relates to their making of income it could still be deductible.

Residential Tenancy Act

Redrawing is treated as new borrowings. If you borrow to fund living expenses the interest will not be deductible and you will end up with a mixed loan. Interest must then be apportioned and it will be impossible to later pay off the non deductible portion first.

Split the loan first.

Get valuation at date of moving out and this will be the cost base – roughly speaking.

Also have the option for keeping it CGT free for up to 6 years s118-145 ITAA 97

If you have paid off your PPOR then why not consider a trust structure?

Get person A to ask person B to hold property for person C!

This is a legal question. There are a couple of ways to do this, but far reaching consequences.

First off – Why do you want to do this?