I have a house here in Sydney with no debt. Value around $900K. I would like to move to a better part of town but I know this means getting into debt that I cant claim against (post tax dollars)> If you were me what would you do?
Here is a dodgy response that I have contemplated: Get a PO Box near where you work and direct all your mail there – as far as the tax man knows you still live there. Treat the new place as an IP , keep the old place, tenants pay rent into the mortgage account. Only problem is capital gains will be taxable on the new place, although there are probably some timing rules which may help you. (Also is a form of tax evasion I suppose – but I actually read something similar in an investors club newsletter once!)
You're one dodgy person but what you just said sounds pretty good. You sure the PO Box thingi works?
You could sell your house to your partner, if you have one, or to your trust. This way you get to keep the house, and have a new large loan which would now be deductible as it was used by the new purchaser to purchase an investment property.
The funds released can then be used to pay cash for the new home..
You will have to pay stamp duty, and that will be very large on $900k, but you will be much better off with having all the interest on the investment = deductible. approx $81,000 per year. But trusts cannot distribute losses, so you need to work a way around have a loss in a trust = hybrid trust or other income in trust.
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
I'm with Terryw. What lilyhutch proposed is FRAUD. Not worth risking jail when there are legitimate ways to achieve tax deductibility.
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