hullo there,
I am wondering if it would be sensible to refinance an IP, to pay off my PPOR.
I owe $35k on my PPOR and I have about $80k equity in an IP. I was thinking that the interest on the new loan would be tax deductable.
But then the IP would be negatively geared. I do not earn that much and dont need too much of a tax break.The other issue is I have no other savings. I have always had the redraw facility available, should I need anything. I have 4 kids to send to pvt school. I do need to have some funds available.
Perhaps it’s time to see a fnancial advisor. Has anyone got any advise for me?
cheers
millyYou could do that, but the interest would not be deductible. The ATO looks at the purpose of hte funds, in this case it would be to pay non deductible debt.
Terryw
Discover Home Loans
Mortgage Broker
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
Hi Milly,
As Terry mentioned, releasing equity from the IP will not be deductible if used for non-investment purpose.
If cash flow is a problem I would suggest you look at ways of reducing your non-deductible debt, Have you investigated the benefits of an offset attached to your non deductible debt, as this may help pay down your PPR debt at a faster rate,Have you considered interest only repayments on the IP debt, as this would also help increase your cashflow, other suggestions may include looking at ways to justify and implement an increase in rent on the IP, Cheers.
Regards
StevenMortgage Broker
Mobile Mortgage Market
Ph: 0402483216
[email protected]
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