I beleive the ATO determines a purchase to occur on the exchange of contracts. Not sure about the Office of State Revenue (or whatever it is called). So this would probably be deemed a purchase and you would not be entitled to the FHOG (unless you will live in this one?).

Terryw
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Boothy

You can’t increase your loan and claim the interest. But you could sell the home. So why not sell it to yourself – or an entity contrlled by yourself. And then the money you get from the sale is the proceeds of the sale of your PPOR and you can do what ever you want with it-put it into your new home etc. No capital gains tax as your PPOR is exempt. But you will be up for stamp duty About $11,600 in NSW on a $360,000 property.

If you just rented your house out as is, you would be paying lots of tax on the rent as you wouldn’t have any interest to deduct. In addition if you purchased a new PPOR then you would have a loan and would be paying interest with after tax dollars. You just have to weigh up the pros and cons.

Another option is for you to buy your spouses share of the property.

Better check with your accountant.

Terryw
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Hi Boothy

Since your current home is paid off, any finance you get on this property won’t be tax deductible. It is just like inceasing your loan balance. It depends on what the funds are used for. If you get a loan on your ex PPOR and use that to buy a new PPOR, then the interest won’t be claimable. But if it is used for deposits on investment property, then it would be claimable against that property.

One possible solution is to sell you PPOR to your trust. You will be up for stamp duty, but thinking long term you will be able to save a fortune. Do some calculations.

Terryw
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Can you get out of the contract?

I had a unit off the plan in Melbourne, prices hadn’t gone up like i expected and i probably paid too much for it in the first place. The construction had gone over the sunset clause, so I just cancelled the contract. I was just up for the price of the deposit bond, and some conveyancing costs.

Terryw
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Boothy

Are you planning, or is there any chance you will come back to live in your house in Sydney?

Terryw
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Try Wide Bay Capricorn. When do you have to settle?

Terryw
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Fixed rates have dropped (probably) since you took out the loans. Therefore will have probably have to pay the bank a large penalty for getting out. May not be worth it. (I recently paid more than $3000 exit fee on one of my 5 year fixed loans).

It would hurt to ask your lender, if you could keep the loan in place and just change it to IO. they may do it with no change. Or you may even end up saving if you break the loan and then go for a lower rate.

Terryw
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John

You could get a pre-approval, but these only last a short time. usually max 3 months, and then they will want updated details such as payslips etc.

If you get a LOC, you could use that to live on, and for deposits. You could possibly use low doc loans, but some lenders require you to be self employed for a min 2 years. There are some that don’t, but rates are a bit higher – around 6.95%. Get an ABN now!

I know the feeling, you are sort of stuck aren’t you. Don’t ahve time to make money! What I did was to get as many wraps as I could which gave me income to live on when I quit work to set up as a broker.

G-man007
Sounds good in theory, but if they are your businesses or companies or trusts, banks will probably just deem you to be self employed. It may work, I’ll have to think about this one.

Terryw
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Kirby

You can look up the title of the house to find the owners. It can be done on the web and should cost less than $10. Look for the Land Titles Office in your state.

You could just pay them the deposit, but You should probably have your deposit held in their solicitors trust account, just incase things go wrong.

Terryw
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Wild nothing

I have found that many people actually buy property and then get the finance.

If you send me all of your figures (all income, debt, credit cards etc), I can give you a rough idea of what you can borrow.

Terryw
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