What is a good next step

Viewing 4 posts - 1 through 4 (of 4 total)

Esther
Participant
@morgana
Join Date: 2015
Post Count: 1
October 18, 2015 - 9:20 am
In around 2 years time my husband and I want to move, to live closer to the beach and to downsize.
Our ppor is valuated at 690.000 Mortgage of 84.000
IP in Umina beach, worth 650.000. Mortgage of 393.000
IP in Port Nuarlunga, worth 360.000 Mortgage of 350.000
In the next months we want to buy an IP north of Brisbane. We have enough savings for a deposit and costs.
We are thinking of moving to Umina beach and rent out our PPOR. But is this tax wise a good idea? Is it maybe better to sell our PPOR and buy another house to live in?
Corey Batt
Participant
@cjaysa
Join Date: 2012
Post Count: 1,010
October 19, 2015 - 4:46 pm
Be careful how you structure this – especially how you mentioned using savings for an IP deposit. It would be much more prudent on tax and your overall position to use borrowed funds to make any investment purchases, any savings can then instead be used to be put onto your PPOR (or Umina Beach if this is to become your PPOR).
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
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Investment Focused Finance Strategist - servicing Australia-wide
Jamie Moore
Participant
@jamie-m
Join Date: 2010
Post Count: 5,069
October 19, 2015 - 8:38 pm
Esther wrote:
We are thinking of moving to Umina beach and rent out our PPOR. But is this tax wise a good idea? Is it maybe better to sell our PPOR and buy another house to live in?
No – not really.
You’ll have a large non deductible debt (Umina) and a small deductible debt against your previous PPOR (now IP).
Might be best to sell the PPOR (CGT free) and then place the funds against Umina (perhaps in an offset just in case you decide to rent this place out later).
In any case – talk with a good accountant about your options.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
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BuyersAgent
Participant
@knightm
Join Date: 2005
Post Count: 338
October 19, 2015 - 8:48 pm
Jamie Moore wrote:
Esther wrote:
We are thinking of moving to Umina beach and rent out our PPOR. But is this tax wise a good idea? Is it maybe better to sell our PPOR and buy another house to live in?
No – not really.
You’ll have a large non deductible debt (Umina) and a small deductible debt against your previous PPOR (now IP).
Might be best to sell the PPOR (CGT free) and then place the funds against Umina (perhaps in an offset just in case you decide to rent this place out later).
In any case – talk with a good accountant about your options.
Cheers
Jamie
^^^ what he said.
BuyersAgent | Precium
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South Coast NSW Independent Buyers Agent - Wollongong to Batemans Bay and Regional NSW. DOWNLOAD OUR FREE 14 POINT PROPERTY BUYER'S CHEATSHEET to avoid painful mistakes at precium.com.au