Hi,
Im hoping someone can shed some light on this dilema.
I am selling two propertys to upgrade into a large home on acreage because of my growing family and as an investment. I will end up with about $210000 in cash approximatly.One is my PPOR the other an IP should i put down a deposit or should i cross collaterise with my other IP or should i pay of two IP”s to cover the new property’s repayments through the rent i will receive. I am a low income earner so even if i have rent coming in it might not get me into the highest tax bracket.Their may be other options so any help will be appreciated.
Thanks DomHi Dom
I think you post sounds a bit confusing.
If you are selling two properties and buying one new one ot be your PPOR (have I read it right?), I would put down all my cash on this property first rather than paying off an IP loan. Even if you are on a low income, it is still better to save tax if you can – and your circumstances may change. Putting down a large deposit would mean you will not have to cross collateralise.
Terryw
Discover Home Loans
North Sydney
[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 Terry ,
You are correct thats what i meant to say,but is their not an other strategy where i can use some of that cash if not all to purchase + geared propertys to help pay the new loan.So you dont have to use any of your own money.Even then i may not hit the highest tax bracket which is around $65000 a year.
DomEven though you say you are selling two places, the terminology suggests you haven’t done so. Do you know how much equity is available to you in those places and if that would be enough to keep you ‘travelling happy’?
Without actually having the figures in front of you and working out whether the 3 or so IPs you seem to have will be a +ve geared or excellent CG earners for the future. If the places were +ve geared then little reason to sell the places but rather use the equity. I’m sure someone has a better idea but a few facts are missing before we could give you a good course of action.
sizzling_duck,
One Ip is neutrally geared the other is my PPor, and 3 positively geared IP”S.
“Do you know how much equity is available to you in those places and if that would be enough to keep you ‘travelling happy’?”
“I will end up with about $210000 in cash approximatly.”This would be a great deposit for a larger property around $450,000.
Dom
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