Hi,
Silly question as usual:
is it possible to take equity from IP # 1 and transfer it to IP # 2 ?
Main idea behind it to make IP # 2 CF+ when IP # 1 remains CF+ as well even with increased loan.
Thank you in advance
Why do you want to do this?
Do you already own the two IPs or do you only own IP #1 and you are hoping to buy IP #2 ?
If you already own the two IPs, are they both held in the same name?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
I have 2 IP. One is CF+ with a lot of equity ~ 150 K ( ex PPOR) and another one is Negatively geared with 0 equity.
I want to have two CF+ IP. yes they are both under my name.
Hi Devilz
Yes you can certainly transfer the equity from one property but i can't really see any real reason for doing so.
It won't benefit you Tax wise as the interest will still be deductible.
Only benefit would be if the properties are cross collateralised and you want the securities to standalone.
This certainly would have some value.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Devilz
Yes you can certainly transfer the equity from one property but i can't really see any real reason for doing so.
It won't benefit you Tax wise as the interest will still be deductible.
Only benefit would be if the properties are cross collateralised and you want the securities to standalone.
This certainly would have some value.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Indeed. If one is making a loss and the other a gain, it is irrelevant. You subtract your total losses from your total gains and that overall position goes on your tax return as one aggregated figure
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Yes, no change to taxation for 2 reasons
1. Purpose of the loan determines deductibility, not securty, and
2. Same owner so a negative on one offsets a loss on the other.
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
Seems to me you are over analysing things – your proposal makes no difference to your overall situation.
Total debt, total asset value and total income all remain the same.
A 'nothing' move in my opinion.
thanks.
all comments make sense
but what if in the future I decide to sell one IP which has a lot of equity? in this case if I increase LVR to max and transfer equity to another IP I will save on CGT. Is it right ?
and another point why I want to do this: That IP is in mining town so it can drop value at some stage (maybe not) so I rather get equity from it now while it is on the top than later.
Make sense or I am silly?
DEVILZ wrote:thanks.all comments make sense
but what if in the future I decide to sell one IP which has a lot of equity? in this case if I increase LVR to max and transfer equity to another IP I will save on CGT. Is it right ?
and another point why I want to do this: That IP is in mining town so it can drop value at some stage (maybe not) so I rather get equity from it now while it is on the top than later.
Make sense or I am silly?
Loan amounts have no effect on capital gains tax.
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
ok I am silly. Thanks Terry
…went to GOOGLE to get more info about CGT….
Hi devil
How much capital gains tax you will pay ,will depend On what price you bought the home for what price you sold the home and how many years you have had the ip
Like the guys said its one account just offsetting another
if the property drops and you use the equity that means your overall net position is still less
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
ok thanks.
so I leave everything as it is and just need to do Valuation for this Unit (ex PPOR) that became IP recently?
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