I have an investment property that used to be my home.
As it was my own home I was paying off the mortgage as quickly as possible. When I brought my new home I did not sell my old home and instead rented it out. I am now in the situation where a rental property is nearly paid off and my own home has a lot owing on it.
According to my accountant there is no way I can legally transfer any of the capital out of my old home into my new home (so that I can maximise tax advantages).
Does anyone have any ideas? I would rather not sell the property as it is in an area that has been achieving good capital growth recently.Thanks
Hi,
I can relate to your situation as I have 2 IPs that have lower gearing than my PPOR.
There are a few things you can do to strip equity of the property but there is a limit if you want to reduce the CGT payable as well as other fees.
One thing you could do ( depending on whose name the rental prop is in) is sell the IP to your partner at your cost base ( ie. original purchase price +capital costs+ legals +stamp duty etc etc). In this way you get to strip out some money and pay no CGT. You will only be liable for 1/2 stamp duty (or rather, your partner would be) and other lending fees that the banks may charge.
hope this helps a little
You could sell your half to your spouse (if it was purchase in two names). Get a loan to do this and the proceeds would be put off your new home loan.
Or you could do as Michael and Kaye are doing and sell your house to your Trust. (see their post today).
Or
Steve Navra’s technique. It goes something like this:
You get a annuity with the purpose of increasing your borrowing capacity-together with a tax ruling. The money from the annuity comes from a LOC secured against the house. The income from the annuity is kept in a 100% offset account linked to your new home loan until you decide what to invest in. This is in effect a way of transferring the money to your new home loan.
I think his site is http://www.navrainvest.com.auTerryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks a lot for the advice. [
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