Every $1 you pay off the existing loan on PI means more tax later.

Yes, change PPOR to IO and get a 100% offset to save interest in the meantime

Tom is correct and it could result in the main loan becoming a mixed purpose loan which will also cause problems.

Look at trusts instead – with a company as trustee.

Companys have a few disadvantages. One is the 50% CGT reduction which is not available so the company will be paying a flat 30% CGT rate where as the individual (direct or via  a trust) will pay a max of 24% but probably much lower.

Another disadvantage is that the income of a company does not retain its character. So if you have a capital gain in the company and this distribute it to a person then income is no longer capital gains but dividends. This means a person with a capital loss could not use the income to offset the loss.

Asset protection is another one. Companies offer limited liability but the shares are property so if you are sued then the company provides no asset protection benefits if you hold the shares. If you are going to use a discretionary trust to own the shares then you might as well use the trust to own the property.

One tip is DONT use a company.

Why are you wanting to use a company?

ps. You could access equity in property you have purchased in your own name too.

Sounds like that house may be in VIC.

If so you are in luck as one spouse can buy out the other spouse at full market value without stamp duty. Any interest on the new borrowings would generally be tax deductible and any cash released can go towards the new PPOR to reduce the non deductible debt.

Shahin, this is not correct.

Firstly if money was borrow to gift to someone then no interest would be deductible at all.

The security of the loan does not matter so whose name is on title for the PPOR is not reallyy relevant.

If the house is in the husband's name be he has a LOC set up in his name and this money is on lent to the wife and the wife invests it then the wife will usually be able to claim the interest.

This is because it is really treated as an on lend with the wife paying the husband interest and the husband claiming the interest he pays as a deduction. Net result is the deduction is in the hands of the wife.

Yes, look at the recent case of Shail where one joint trustee took off with the money and the other trustee was fined for it!

forgot to add land tax to the list too

hi ziv

in indonesia 
this is actually what happened to a mate of mine. his propertty was stolen by an ex girlfriemd and he has been trying for years to get it back  he has a supreme court order that says the property is his but still having trouble getting it tranfered to his name after 3 Years
there was a mistress of the local police chief renting it too and she stopped paying the rent so all sorts of problems