Accessing Equity in IP for PPOR Deposit

[BlindBull]

I am in the position where I have equity in my investment properties, but am in need of upgrading my PPOR. I know that if you redraw from an IP this capital can only be used for investment purposes or the additional interest will not be tax deductible.

Is there any way to access the equity in my IP?s to use for a PPOR deposit without selling an IP?

If you redraw from an IP and invest in a more liquid asset such as shares, if you were to sell the shares is that capital then available for use as a deposit for a PPOR without affecting the original tax deductible loan?

Many thanks for your thoughts/ comments..

 

[Brady]

Simple - new seperate loan using the IP as security for the purpose of PPOR deposit. Two seperate loans for seperate purposes, no worries.

 

[Rolf Latham]

Hiya BB

the loans cant be washed that way

The best you can do whie still holding the IPs is to look at as much debt recycle as possible, perhaps with a spousal sale or unit trust ( if at all applicable) and then after getting all that new non deductible debt, look at debt recycle structure with a decent planner

ta

rolf

 

[Scott No Mates]

Note that a sale to a trust, your spouse etc may trigger a cgt event, cost $ in stamp duty and exposure to land tax if transferred to a trust.

Seek legal, financial and marital advice

 

[Terry_w]

I take it you want to borrow to buy your PPOR and claim the interest.

The answer is that this is not possible.

But, you can start transferring assets where it could be possible for the transfee to claim the interest.

 

[BlindBull]

Thank you all for your replies..

Brady - could you please elaborate further? Wouldn?t the equity taken from the IP then not be tax deductible?
Even if I was to wrap up the current IP loan and establish a new loan with the IP as security, wouldn?t any amount used for a PPOR then not be deductible?

Many thanks

 

[Brady]

This was your question

Is there any way to access the equity in my IP?s to use for a PPOR deposit without selling an IP?

Answer is yes you can access your equity, seperate loan which can be used as the deposit for the PPOR. The purpose of these funds is for PPOR therefor that portion isn't tax deductable. But the seperate original INV loan still is.

So yes you can do it but you can't claim deductions.


How have you been doing your banking now? Is your IP P&I or IO? What plans have you got in place for your banking? Did you discuss these plans with the person who set up your finance?

 

[BlindBull]

Thanks Brady.. That makes sense.
I have a broker but haven?t discussed my plans with him yet. I have 4 IP?s with one loan fixed P&I, one variable P&I and the others IO.. All loans are stand alone. All positively geared, so want to bring the portfolio to neutral and use the equity as the PPOR deposit..

Cheers