Can anyone please help with the following scenario?
My friend currently has an investment property valued at $220K with a standard variable principle and interest loan of $135. He has made prepayments of $27K. He now wants to withdraw the prepayments to put into a PPOR.
After doing some reading it has occurred to him that if he does this then he has lost the ability to tax deduct that portion of the loan. It seems that he has made a big mistake because if he had just kept this money in a separate bank account then this would not have happened.
He has come up with the idea of withdrawing the money and putting it into a separate account used only to pay the interest and expenses for this property and continuing to do this until the prepayments are nil. (This will take about a year and a half) He figures that this is withdrawing the prepayments to pay tax deductable expences so this is the only way to get around it.
He needs to buy a PPOR first and then refinance the investment property loan to buy another investment.
Does anyone have any ideas about this? Any advice would be much appreciated!!!!
T & T
Before i offer an answer:
1) Which State is the property in?
2) How much did he pay for the original property and in what year?Richard Taylor
Residential & Commercial Finance Broker
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
The property is in QLD and he paid $188K.
Sorry – it was purchased in 2004.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
