After Some Advice

[esperance]

We bought a property in Sydney in mid 2006 for 360K of which 250K is currently owing. Due to a new job last year, we moved interstate and rented the property to family for 300\week (this is market rate).

We are planning to purchase another property to live (as we are currently paying rent of 1750\month). I am seeking some opinions on how to do this best - we'd like to maximise our tax benefits + pay off the new property quicker.

My initial thoughts are to re-draw the money on existing property to 80% of the property value and pay interest only. We'll then pay off the new property as quickly as possible.

Any advice would be appreciated. Feel free to ask additional information.

I am married with 2 kids, aged 6 & 4. Wife works part-time. Current annual combined income is 130K.

 

[esperance]

New property we are considering is between 500-550K, brand new house.

I forgot to add we are salary sacrificing the rent we're paying now (1750\month).

Thank you in advance for reading and advice.

 

[BayView]

The funds you draw from the existing property's equity to buy the new PPoR will not be tax deductible, as the purpose of the loan will be for personal use.

 

[Rolf Latham]

Hiya

Are u going to be buying in Esperance ?

What are the incomes used to support the purchase please ?

How long will you be staying in esperance ?

First of a lot quesstions

ta
rolf

 

[esperance]

@ L.AAussie - thanks. In the last 12-18months I managed to pay 50K as extra payment (offset account) to the Sydney property which I am planning to re-draw to help fund purchase of the new property. Not sure if this would change the tax benefit?

@ Rolf Latham - Yes, buying in Esperance. Income is from salary + rental of the first property. We intend to stay at least 3 years, most likely 5 years.