Hello,
My dad has two loans, one for the house he is currently living in, and another for an investment property. The investment property is around that stage where the rental income is just about meeting the loan repayments, so he can’t negative gear it too much. Is it possible to transfer the balance of the loan for the house he is living in, over to the investment property loan, and thus negative gear all the interest for that single larger loan?
What does the ATO have to say about this?
I understand this is subject to bank’s approval, but he is looking at re-financing anyway (he’s paying too high an interest rate compared to
what’s available).Thanks,
Mal
Hello,My dad has two loans, one for the house he is currently living in, and another for an investment property. … Is it possible to transfer the balance of the loan for the house he is living in, over to the investment property loan, and thus negative gear all the interest for that single larger loan?
MalPatti
Check with your accountant about this, but I am sure that it is not possible to transfer non deductible debt and make it deductible without incurring the wrath of the tax office.
If your dad wants to release the mortgage over his home, you can transfer debt to the IP as security, set up split loans for accounting purposes and then you can clearly identify the interest and charges relating to the deductible debt and keep Mr Costello happy.
If you have enough equity, you can also get another split to do more investing.
If you want more detailed info, send me an email to [email protected]It may be possible, depending on the situation, to sell the investment property into a trust at the market value giving your father the cash to pay his home loan off. Check the viability of this as there are stamp duties etc that must be taken into consideration BUT it can be done, just seach till you find the right advisor
Thank you very much, I shall definately contact some accountants and see what they have to say… life wasn’t meant to be easy after all!
Sincerely,
Mal
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