I have a property (PPOR) in my name which I have been living in and paying off for the past 5 years, however I recently married and have moved into his PPOR. I would like to look at perhaps refinancing my property (soon to be IP) to maximise tax deductions against interest. Will this have tax implications (messy interest proportions etc) for me if I refinance before it becomes tenanted and classified as an investment? Our plan is to soon also rent out his property and join our funds on a third to become our PPOR.
Hi Amanda,
Regardless of when you refinance, the test for deductibility of interest is, what are the borrowed funds used for?
If you use the funds as a deposit for your PPOR, then the interest will not be deductible.As Dan has mentioned regretfully you have missed the boat there unless you look to sell the property into a Trust structure but this will incur additional Stamp Duty.
Dependant on the market value and the income numbers may still be worth it.
Sounds like you might need some specialised structuring advice to avoid further errors.
Interest only with 100% offset is one of the prefered structures on both IP and PPOR especially if you think your current PPOR maybe become an IP shortly
Richard Taylor | Australia's leading private lender
Where there is a will (you know the rest), although legal, I would still like to represent this idea privately, drop me a line/ email.
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