I am currently in a de facto relationship, my partner has two properties.. the property we live in (NSW)and an investment property in QLD. I initially sold my IP to help fund the residential property ( he was entitled to FHBG so I stayed off the loan and title). The IP has plenty of equity that we ultimately want to access and use to pay down the home-loan. I am not on either loan, is it possible to add my name to the IP and increase the loan to gain tax benefits? If so is it better to do this before or after we are married?
Hi naomism
Firstly welcome to the forum and I hope you enjoy your time with us.
I must admit i have read your post a couple of times and am still not entirely convinced i understand what you want to try an achieve.
Borrowing funds using the IP property as security and then using these funds to pay down your PPOR debt will not eliminate the debt as the interest will not be Tax deductible. Interest deductibility is based on the "purpose" of the funds and not the security taken to finance the deal.
In your scenario clearly the purpose is to pay down a PPOR loan which makes the interest deductibility void.
There maybe a way to sell part of the property to you however this would trigger Stamp Duty and possible CGT.
Without further information it is difficult to advise further.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Apologies for not being clear…. My partner has the two loans ( PPOR + IP ), the equity is all in the investment loan, there is not a great deal owing therefore not a great tax return…
I am wondering if its possible to sell / transfer part of the property to me, I would buy in at current value and refinance the loan into 2 names and increasing to a 80% LVR…. or I could even buy him out prior to us getting married. I understand that there would be stamp duty … but long term I am thinking of the tax benefits….thanks for your help.
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