Can anyone tell me i we can legally draw down on equity from investment properies to pay off our home and still claim the interest as a deduction. If invest. prop loan is 100K then 2ook after using the equity can one claim interest paid on 2ook or only on 100k.
If the purpose of the drawing is for personal debt such as a home then the loan is not deductible.
I suggest you sit down with an accountant to see if there is any way you can restructure your ownership.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
There is no legal way of doing this. Paying off non-deductible debt regardless of the source of the funds results in the cost of those funds remaining non-deductible.
Look at alternative structuring to pay your loan down quicker. It is pretty amazing what can be done with some minor changes to how you pay your loan.
TMA
http://www.email4money.info
Investor Links
First Home Buyer WebsiteRob,
As you know you can change ownership and take out new loans with as much as possible being against the IP.
Be very careful as you will incur SD and CGT. It may not be worth the cost to set up.
Cheers,
Simon Macks
Residential and Commercial Finance Broker[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Yep. That is why I buy property in a company name. If I want to live in it, I just ‘rent’ it from the company. I have never owned a PPOR.
The stupidest thing I ever done was buy land which, I was advised, is non-deductible until I put a structure on it. Never again!
TMA
http://www.email4money.info
Investor Links
First Home Buyer WebsiteTMA
There is a recent post titled NO INCOME FROM PROPERTY -DEDUCTIONS YOU CAN CLAIM by MIKALA in regards to land deductability whilst building here is the link
https://www.propertyinvesting.com/forum/topic/18518.html
I have confirmed this with my accountant as well.
Regards
Regrow
You are a fool for 5 seconds if you ask a question, but a fool for life if you don’t.
Thanks regrow. Looks like I am still screwed as it has been more than 12 months and construction has not started. I can always work it out later when I eventually build and back-date any available claims. May even end up working tax-free for a few years when considering the amount of interest I have paid.
TMA
http://www.email4money.info
Investor Links
First Home Buyer WebsiteHi TMA..
I was told by my accountant that buying in a company name was probably not the best entity for my personal situation when investing..however a trust would be better suited..?
What benefits do you see with the company structure if you dont mind me asking?
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorI just find it cheaper to operate and more flexible than a trust. I also utilise the trust structure in some cases.
TMA
http://www.email4money.info
Investor Links
First Home Buyer WebsiteTMA
I have also heard that if your company is incorporated in Victoria, then it is possible to sell a proeprty by transfering the shares in the company without incurring stamp duty. Apparently doesn’t work like this in all states however.
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
Hi folks, I am very interested inj finding out some more about renting a property from my own company. I found your comments TMA extremely intertesting. Can you tell me more, how dificult is is to transfer a property from an individual to a company?
Charlie
Charlie
Its easy. But, You have to sell it to your company = CGT, Stamp duty, and legal costs.
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
hi all
with regard to the company against trust.
any accountants put there.
I was of the opinion that when you sold a property out of the company that capital gain was at 42% were as trust if setup correctly is substantally less.
also as I have read there is different rules for company transfers with in different states.I will have a look at this its very interest.
tma you may have alook at your cost of selling if they stay in a company mine are multiple trust but reading this web site I’m glad not in vic.here to help
I beleive companies do not pay CGT. Any profit owuld just be taxed at 30%.
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
Not quite Terry,
Companies are not eligible to any CGT concessions ( ie…50% CGT discount after 12 months)therefore any profit from the sale of an asset is fully taxed, but at the company rate.A trust or individual may be elibible for a CGT discount of 50% depending on certain conditions ( its a tax law…so it gets very grey)
So in fact you may still be better off paying tax on profit with a 50% CGT discount at the top marginal tax rate compared to paying tax at the company rate.
kp
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