Hi all, I have been reading very similar articles to this issue, but I am still unsure to my situation,so here it is.
My partner and I are moving to Perth city from kalgoorlie.
We bought our house four years ago for 280k took out a 250k loan which is 100% offset. We now have 100k on the amount owing and 50k in offset. So 50k owing when offseted.
The house (without a surveyors report) would be worth between 300k-330k. I put 40 k into it, so it owes me 320k without legal,selling fees etc.
The rental. Has been appraised by four different agents coming in from 420pw to
I would like to keep it for a few reasons, incase it all goes pear shaped in Perth, and the rents really good.
When turning my ppor into ip I would like to keep the loan slightly neg geared by less than 100pw if possible.
My questions are.
What loan structures are best for my situation.
I have not yet found any helpfulness in kal yet anyone can recommend someone in Perth?
Can I withdraw most of the amount from my house to dump into the ppor?
As the capital growth has not been very good and prob won’t be that great in the next few years a partial cgt won’t be so great, should I keep it?Thankyou
Hi Jpr
Firstly i hate to say i think you need some specialist help on this one as the funds you have paid off the principal to date you cannot have back by way of redraw and claim a deduction on the interest.
What i would probably look to do is switch your current loan to an interest only loan and at the same time look to take out a further sub loan to a maximum of 80% of the market value. Whilst the interest on this sub account wont be Tax deductible at least you will have access to a deposit and acqusition costs when you sign your new PPOR contract.
Then once you have located the propery take out a separate loan maybe even with a separate lender secured solely on the new PPOR property itsefl. Delink the offset account from the current PPOR loan and ensure that your new loan has one linked.
If you think the new property is going to be the dream home and you intend to reside there for a long time make the loan P & I however if not make it IO as otherwise you will be in the some position as you are now if you decide to rent it out and buy again.
In saying all of this i am assuming the property is owned solely as otherwise there maybe a few alternatives depending on the location of the property and the actual numbers involved.
Your Broker should be able to assist further going forward.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Its seems the original loan may have been set up well with an offset but not used correctly because you have paid down the loan to a large extent.
This has locked the money up and it cannot be redrawn tax effectively.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Damm that’s inexperience for you, yes I paid down a large portion about a year ago. It might seem like its easier to sell.
Sometimes it is better to sell and then take the money and set yourself up properly and more tax effective next time. Don't be too hard on yourself as it is a common mistake and you have still done well.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You must be logged in to reply to this topic. If you don't have an account, you can register here.
