I'm wondering if anybody might be kind enough to shed some light on a few possibilities I'm thinking of.
I have a PPOR worth $400K with two mortgages on it:
1. $250K remaining on PPOR debt (non-deductible);
2. $80K which has been used to purchase a $330K IP (deductible).
My $330K IP also has a $250K mortgage against it (deductible).
One possibility for us would be to subdivide our PPOR, sell the vacant rear block ($130K??), sell the PPOR house ($360K) and then purchase a more expensive PPOR ($600Kish). OK, now for the questions:
Question 1:
Would there be any capital gains on the sale of the PPOR house and the vacant block of land behind it if they were sold separately to maximise profits? If so, how would the CGT be calculated (including costs of subdivision)?
Question 2:
What would I do with the $80K mortgage against my PPOR? Could it be transferred and held against the new PPOR? There obviously wouldn't be enough equity in the IP to borrow against that without incurring LMI.
In terms of our current goals and in light of some very favourable pay increases on top of private practice business opportunities we'd like to have a more comfortable PPOR before we start a family. I'm ok with the idea of having higher non-deductible debt for a PPOR whilst continuing to accumulate IPs with the plan of eventually selling some off to pay off the non-deductible debt entirely. In other words, I'm happy to have an expensive PPOR as long as I can borrow substantially against it to purchase IPs.
I have a PPOR worth $400K with two mortgages on it:
1. $250K remaining on PPOR debt (non-deductible);
2. $80K which has been used to purchase a $330K IP (deductible).
My $330K IP also has a $250K mortgage against it (deductible).
One possibility for us would be to subdivide our PPOR, sell the vacant rear block ($130K??), sell the PPOR house ($360K) and then purchase a more expensive PPOR ($600Kish). OK, now for the questions:
Question 1:
Would there be any capital gains on the sale of the PPOR house and the vacant block of land behind it if they were sold separately to maximise profits? If so, how would the CGT be calculated (including costs of subdivision)?
Question 2:
What would I do with the $80K mortgage against my PPOR? Could it be transferred and held against the new PPOR? There obviously wouldn't be enough equity in the IP to borrow against that without incurring LMI.
In terms of our current goals and in light of some very favourable pay increases on top of private practice business opportunities we'd like to have a more comfortable PPOR before we start a family. I'm ok with the idea of having higher non-deductible debt for a PPOR whilst continuing to accumulate IPs with the plan of eventually selling some off to pay off the non-deductible debt entirely. In other words, I'm happy to have an expensive PPOR as long as I can borrow substantially against it to purchase IPs.
