Accountants Help!!! I'm nearly under contract

[dafunk]

To the many people wiser than me on this forum

thanks for looking

As the title says I've had an offer accepted on IP2 that i want to buy
We are going through the documents but i havent signed the contract yet

I will be funding it with cash in the form of advanced payments or maybe equity from IP1 pending valuation result

The plan was to turn it into a dual occ property (whilst living there) and rent out one half whilst living in another

I've been told that I can't live there coz i'm buying it as an IP even if it becomes an eventual dual occ (within 6 months)
I've also been told I can't buy it as a PPOR either coz the funds were from an investment property (funds can only be used for investments not PPOR)

I would like to know is there any truth to this?
and what is my actual position in all of this?
what are my options?

should i be going ahead with buying the property?

 

[sanj]

You have been a member of this forum for over a year, you would know who the accountants are. I'd suggest giving one of them a call and paying for some advice if you need it done in a rush. All you'll get here is opinions, sounds like you need specific advice.

 

[dafunk]

I was planning on calling tomorrow either way

It is rushed so i was hoping i'd have some clues/options by tomorrow when i did call

My first IP was bought this financial year so there has been no formal interaction with accountants yet

 

[Rixter]

It is rushed so i was hoping i'd have some clues/options by tomorrow when i did call

Thats what you are calling your chosen tax advisor for. To get options & advice.

 

[dafunk]

thanks for the replies

i think this situation is actually a blessing in disguise now

 

[Terry_w]

To the many people wiser than me on this forum

thanks for looking

As the title says I've had an offer accepted on IP2 that i want to buy
We are going through the documents but i havent signed the contract yet

I will be funding it with cash in the form of advanced payments or maybe equity from IP1 pending valuation result

The plan was to turn it into a dual occ property (whilst living there) and rent out one half whilst living in another

I've been told that I can't live there coz i'm buying it as an IP even if it becomes an eventual dual occ (within 6 months)
I've also been told I can't buy it as a PPOR either coz the funds were from an investment property (funds can only be used for investments not PPOR)

I would like to know is there any truth to this?
and what is my actual position in all of this?
what are my options?

should i be going ahead with buying the property?

No truth to that whatsoever.

 

[Paul@PFI]

As above - Wrong. Simple facts:

1. Lenders sometimes lend for "owner occupied" housing. They need to OK if its an IP. A good broker will source the right loan & lender. The bank pays them.
2. If you reside in half the Dual Occ you cant claim 100% as an IP for tax. Just 50%. Same with CGT.
3. It is the USE of the borrowed money that gives it a deduction. NOT the security used for the loan. So in the example if you draw down LOC against your own home to buy an IP the use of the new loan is to buy IP so interest is deductible against the new IP. If you draw down against the new IP and buy a car the purpose is private so that redraw is non-deductible.

You arent the first person on SS to question the security used for the loan v's its purpose. I wish I had a dollar....