All Topics / Help Needed! / REFINANCE IP1 USE $ REDUCE IP2 LOAN SOON BE PPOR

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  • Profile photo of midgetmidget
    Member
    @midget
    Join Date: 2005
    Post Count: 1
    February 10, 2005 - 6:27 am

    I currently have a portfolio with 5 IPs, land intended to bulid IP holiday rental and a PPOR.

    I want to know if i can refinance 1 or more IPs and use the extra money to reduce the loan on another IP.

    This property will become our PPOR in around 12 months time.

    Profile photo of crjcrj
    Participant
    @crj
    Join Date: 2004
    Post Count: 618
    February 10, 2005 - 7:00 am

    Bear in mind that while if you refinance and use the money on one of your existing IPs the interest will only be deductible while the purpose of that existing IP is to earn assessable income, ie once it becomes your PPOR the interest will not be deductible

    Profile photo of alfamickalfamick
    Participant
    @alfamick
    Join Date: 2004
    Post Count: 41
    February 10, 2005 - 7:12 am

    Unfortunately, your plan has no benefit; the tax deductability of the loan is not determined by the property it is secured against, but rather the property for which the funds were used to finance. So drawing against one to pay off another does not help you in this instance. You are just shifting the same loan between security properties.

    Cheers,
    Mick

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