I'm new in investing and a very cautious person!
We want to buy a 2nd home and convert my current home into an investment property. If I want to use the equity in my current home and use this as a deposit for my new home will all loan be tax deductible i.e. original loan $245,000 plus equity deposit $155,000 new loan $400,000. Would all interest from $400k tax deductible?
We've also just started looking for a house thinking it would take us a couple of months at least…didn't expect to find a house we like to buy straight away! So, we've expressed interest in putting an offer in a house but obviously subject to successful conversion of this current property to investment property…
What to do?
Hi JJ
No only the original $245K will be Tax deductible regretfully.
The figures are too close to think about selling into a Trust and borrowing the full 100% for investment.
Suggestion would be to make sure your mortgage broker structures the new loan in a manner that you can reduce the interest on the new PPOR and maximise the deductions on your IP.
ideally make sure they are not cross collaralised.
Richard Taylor | Australia's leading private lender
You must be logged in to reply to this topic. If you don't have an account, you can register here.
