Equity ?

Viewing 6 posts - 1 through 6 (of 6 total)

Chris73
Participant
@chris73
Join Date: 2004
Post Count: 4
August 31, 2005 - 10:09 am
Hi guys ,
i am looking at moving out of my existing house making it my investement property , i want to puchase another house in which i will live .( closer to work ).
My house has has a value of 380k and i owe 155k on it .i am looking at ways to draw on the equity to put into my new house .
My question is can i still claim all of the interest portion of my IP loan as a deduction ?
Cheers
Mortgage Hunter
Participant
@mortgage-hunter
Join Date: 2003
Post Count: 3,781
August 31, 2005 - 10:18 am
You will be able to claim the $155K used for the IP. If you draw mwore for the home then have it seperate on the loan statement. This new amount wont be deductible
Cheers,
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Chris73
Participant
@chris73
Join Date: 2004
Post Count: 4
August 31, 2005 - 10:32 am
Thanks for your response , I am a little dissapointed to tell you the truth . Any suggestions on how to overcome this hurdle?
Mortgage Hunter
Participant
@mortgage-hunter
Join Date: 2003
Post Count: 3,781
August 31, 2005 - 10:37 am
Sell the property to a spouse or trust for the market price. Have them borrow 100% plus costs.
This loan is now deductible.
Factor in Stamp Duty on the transfer – may be avoided in some states with a transfer between spouses.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
kiama
Member
@kiama
Join Date: 2003
Post Count: 2
August 31, 2005 - 11:05 am
Hi there Chris,
In answer to your question…
No, you can not claim all of the interest portion as you are buying an owner occupied home, not an IP.
Look at selling your existing home to purchase oo (owner occupied)& another full IP, this way your existing will not encur capital gains in the future & IP will be 100% tax effective.
Kiama
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
September 3, 2005 - 2:16 pm
And do a search. This is a common problem and seems to pop up about once a month here.
Terryw
Discover Home Loans
North Sydney
[email protected]
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au