Hi everyone
First post in here so here goes.
I currenty have a 50% share in a property with no outstanding mortgage. I have negotiated to purchase the remaining 50% from my investment partner and the property will then become my ppr. However, once I have purchased the other half of the property I will then be looking to invest in another property.
In applying for a loan to purchase the remaining 50% in my ppr, I am also looking to unlock the remaining equity. To achieve this I am looking at loans such loc, offset, etc, up to 80% of the total value of the property. My question is this. If I unlock the equity through a all in one loan such as a loc that also cover the purchase on my ppr, will I still be able to claim tax deductions on the portion used for a future investment property? Or do I need 2 separate loans?
Regards
it is easier to ask for forgiveness than it is to get permission
Hi ybuddha,
Yes you can claim tax deduction on the portion of the loan that you use for investment property. What you can do is split the loan so it is easier for your accountant, so that the portion of the loan that is to purchase for you PPoR is in one account and the remaining LOC for deposits on future investment properties is in another account. This can still be under the same loan facility. Look at what's called a professional package. Most banks have them with different names, but they operate so you can have numerous splits and loan facilities with usually only one annual fee.
Cheers
Matt Centrone
Property Investor and Financial Strategist
[email protected]
Ph: (08) 8212 0788 Mob: 0402278019Hi ybuddha
As Matt has eluded to it is not difficult it is just a matter of structuring it correctly.
It however seems a shame that you will not be able to claim the interest on 50% of the value of your current property being the portion used to purchase your share of the PPOR.
Before you rush have you looked at all the altenatives. Do you really want to live in the current IP as you PPOR?
What are the purchase price / valuations of both properties and what is your current marginal tax rate.
With some structuring and dependant on the valuations of the 2 properties you may find that you can claim 100% of the refinance on the property which you are buying of your partner and use the suplus funds as deposit for your new PPOR.
Would need more information to make a detailed analysis of the numbers.
Richard Taylor | Australia's leading private lender
Thanks for your comments Matt & Richard. I've had a look around and seen some products that allow splits etc. Now just a matter of getting it organised and sorted. The quicker the better!
Richard as for choosing my current IP to be my PPoR, thats pretty much already a given as I had some fairly extensive renovations done to it while I get ready to move into it. Obviously by business partner and I agreed to a price pre-renovation and I met the cost of the reno!
Cheers guys
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