All Topics / Finance / refinance PPOR as an investment

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  • Profile photo of stay_cstay_c
    Member
    @stay_c
    Join Date: 2008
    Post Count: 2
    August 15, 2008 - 3:57 am

    Hi,

    is it possible to borrow against a fully paid off PPOR and turn it into an IP using the funds to buy the next PPOR  and claim the interest expense on the IP? I was advise not to fully pay out and leave some debt so I could refinance from? Is this true?

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    August 15, 2008 - 8:57 am

    Hi Stay C

    Firstly welcome to the forum and i hope you enjoy your time with us.

    Whoever has given you the information above has unfortunately misled you and as suggested will not achieve want you require.
    If you redraw the funds on your current PPOR to fund the next property the interest will not be tax deductible.

    In saying this there are a couple of options as i was saying to a client earlier today in order to achieve the desired result however they will come with some cost (normally additional stamp duty).

    Depending on the numbers it could still be very viable although additional information would be required in order to provide  a structured answer.

    Richard Taylor | Australia's leading private lender

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    August 15, 2008 - 12:21 pm

    I agree.

    you can do that but the interest won't be deductible as the purpose of the loan was to acquire a personal asset.

    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

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