All Topics / Help Needed! / Moving in to Investment Property

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  • Profile photo of NewbieNewbie
    Participant
    @newbiek
    Join Date: 2015
    Post Count: 2
    January 16, 2015 - 1:55 pm

    Hi All,

    I am very new to property investing and need some help. Please excuse my lack of knowledge!

    We have become property investors by accident and need some advice on loan restructuring (if it is possible).

    We have 1 investment property valued at 1.3 million with a 95% IO loan and is cross collateralised (secured against IP and PPOR). For the last 12 months we have claimed large deductions from interest repayments.

    Our original intention was to buy the IP, rent it out for 2 years, then sell our PPOR and move into the IP.

    Our situation has changed and we can afford to keep our PPOR and turn it into an IP. Our PPOR is valued at 1.1 million with a $350K loan (offset).

    We are also about to leave the country for around 1 year and rent both properties out. In 1 year we will return to live in the original IP, which has a huge mortgage and will have non-deductable interest.

    Can we restructure our loans at all in this situation? We would like to increase our loan on our PPOR now. Does it make any difference that both properties will be IP for the next 12 months and our PPOR will not be either of these houses?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    January 17, 2015 - 5:24 pm

    You can restructure but what are you trying to do? Increasing a loan wont necessarily mean more tax deductions.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of NewbieNewbie
    Participant
    @newbiek
    Join Date: 2015
    Post Count: 2
    January 19, 2015 - 1:01 pm

    Hi Terry,

    In 12 months when we are living in our current investment property we would like to be able to claim as much of the interest as possible as a tax deduction. Unfortunately we have a large loan against this property and much smaller loan against our other property (currently our PPOR).

    Can we change the value of the loans to achieve this? i.e. reduce the large one and increase the small one? Soon we will be living in the UK and both will be IP until next year when we return.

    I know the bank will do this. I’m just wondering about the ATO rules.

Viewing 3 posts - 1 through 3 (of 3 total)

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