Dear All,
I am relatively new to the investment scene and would greatly appreciate any comments/advice you may have for the following scenario:
My partner and I own two small properties. Both were bought in our own names before we met. For the last two years, we have resided in my partners property and my property has become an investment. It is now positively geared.
Now we are at stage in our life when we need a larger house, but would like to retain our current two houses for investments.
Is it possible for me to refinance my (positively geared) investment property and use the equity to purchase my partner's property (it is in her name) and then my wife can use the money from the sale of her property to purchase a larger property for the both of use.
The interest for the two investments loans would now be tax deductible and some equity would have been released to purchase our own home.
Would this be acceptable to the ATO? Is there an alternative method?
Thanks In Advance,
Curious Investor
From what you've said, the interest on the loan to purchase your wife's property should be deductible.
The only other issue, if I've read it correctly, is that the two investment properties would then be in your name. Depending on your income and your wife's income, this may or may not be the best strategy for tax purposes.
and to add on to the last comment. dont forget if the house goes into your name you will get struck with stamp duty. so you mite be better to leave them in each of your names and convert them to ip, then you can still borrow the equity to buy your new home.
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