Dave&Sue
28-03-2007, 06:51 AM
Hi,
Weve managed to accumulate a few investment properties over the years. We have kept all our investments separate from our personal finances and to purchase new properties we have funded the deposits by revaluing properties up to 80% and taking out the equity. In our case we have property A that grew in value, we refinanced it to give us a LOC. We used that LOC to pay the deposit on two new IP's and also pay the rates and some other expenses on the new properties as they fell due. My question is, if we sell one of the new IP's would the deposit and expenses funded from property A need to be refunded to property A if we intended to use the proceeds to purchase a private residence. My thinking is that property A will still have debt that relates to a property that doesnt exist anymore and if weve spent the proceeds on our personal residence does it mean we have to track all the money spent on the sold property as that portion of the original loan becomes non deductible.
I just wanted to get some advice around this before it became too tangled a web. Does anyone have any advice for us?
Weve managed to accumulate a few investment properties over the years. We have kept all our investments separate from our personal finances and to purchase new properties we have funded the deposits by revaluing properties up to 80% and taking out the equity. In our case we have property A that grew in value, we refinanced it to give us a LOC. We used that LOC to pay the deposit on two new IP's and also pay the rates and some other expenses on the new properties as they fell due. My question is, if we sell one of the new IP's would the deposit and expenses funded from property A need to be refunded to property A if we intended to use the proceeds to purchase a private residence. My thinking is that property A will still have debt that relates to a property that doesnt exist anymore and if weve spent the proceeds on our personal residence does it mean we have to track all the money spent on the sold property as that portion of the original loan becomes non deductible.
I just wanted to get some advice around this before it became too tangled a web. Does anyone have any advice for us?