hi there
I currently own and live in a property in NSW. Brought it for $500k and is now valued at $600K. I have a $300k mortgage.
I am thinking of buying a new place to live in and renting out my current place. Two questions:
1) Can I refinance my current home with a $600k interest only loan (taking out all the capital and putting it into the new home and using that as security for both properties) – thus maximising negative gearing?
2) I have my current place valued at $600k. If I sell it in years to come, from a CGT perspective will the property be valued at $500k (what I brought it at) or $600k (what it was worth when it ceased being my principal place of residence).
thanks
1. No you cannot refinance the the original property to increase the available tax deuction (but you can be creative depending on your circumstances, name on the title etc).
2. Yes the property will be valued at $600k for CGT purposes,
You have confirmed yet again the reason why you should almost never pay your home loan down and why you should almost always borrow the maximum.Sorry, and who are you helping?????? I can answer that , that will be yourself…….
thanks Birchcorp – I'll check out your website
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