I am currently living in a home that I purchased 5 years back in joint name with my wife. Current valuation 350K, loan balance 200K. I redrew 50K to put deposit on buying a new home. I would make the new home as PPR in a month's time. New home is worth $450K, loan balance $400K.
Looking at the fact that current market is not a good market to sale and both of us does not have common agreement to sale, we would like to keep the existing property and rent it out.
I would like to know possibilities / scenario to provide me with structure (like trust etc.) where most of my outstanding loan ($200K + $400K) is part of investment (say $325K instead of $200K) and hence claimable and smaller loan against my PPR and at low initial cost.
Thanks for any suggestion.
Can't be done !
You have essentially borrowed 50k via redraw for your Private use being deposit for PPOR (Main Dwelling)
So if you rent out original house interest claimable will be on 150k loan.Also the Tax office look/ audits investors who incorrectly try to claim interest on borrow money for a new house and then try to claim the new loan as an investment loan when it is for a private purpose.
Duckster raises a good point. This is not something you should try and stinge on. Go and see a qualified professional and get professional advice. Forums are good to learn the ropes, but accountants know their stuff and the correct advice could save you a lot of money….legally.
Ryan McLean | On Property
http://onproperty.com.au
Email MeThanks for reply.
Given that the rental income on that property would be higher than the interest which I have to pay, then this becomes a POSITIVE geared property.
Now my question is:Is there any way to convert a positive geared property into a negative geared property?
For example if I get some new loan to buy my wife's share on the property? Do I have to pay stamp duty for that?
You must be logged in to reply to this topic. If you don't have an account, you can register here.
