Depends on many things, like is it cashflow positive? Who earns the most income? etc

I would say, probably a hybrid trust is best, with the unit holder being the higher income earner.

Best check this with a good accountant.

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What about buying to live in first (maybe rent out a spare bedroom), get the grant and establish this property as your PPOR. You will then be able to rent the place out and claim all deductions and still be exempt for up to 6 years from CGT. You can get your cake and eat it too!

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Idon’t think it would matter which loan you paid extra into, the overall interest would be the same either way. But if each loan has fees, then it would be good to pay one off quicker, and the smaller one would be easier to pay off in this case.

If you have 2 loans and no investment properties, i assume that both are for your home. If one loan has been used for business or other investments, then it would be better to leave this one IO, and pay off the home loan first – increasing your tax deductions.

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I have heard a few people increase their mortgage before moving out, and then claim the whole interest portion as a deduction, and use the funds to pay down the new home loan. Technically they have not increased the mortgage for non investment purposes after the property was an investment, so they feel safe in claiming all of the interest. Don’t think the ATO would see it this way, but the chances of an audit are slim.

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Don’t really think there is much you can do to minimise it unfortunately.

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Sure you could use the equity to pay off your home loan, but the interest would not be deductible – leaving you in the same situation.

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Yes, just set up a new trust. If necessary the income can be distributed to the unit trust.

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With borrowing under a unit trust structure, lenders will usually require all unit holders to guarrantee the loan, each being jointly and severably liable for the whole debt. If there are several people, then this can get very messy, and risky- what if the others stop paying?

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If using a LOC on your existing home, then you are probably paying all income etc into this loan. Just becareful if you start using this for investments as it can have serious tax consequences if you mix investment and non investment portions.

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Overall, it wouldn’t matter which property’s loan you put the money into. Your net tax position would be the same. Maybe putting it into a 100% offset account?

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