changing PPOR to an IP??

[voodoo]

Hi,

I have a quick question.

If I owned my current PPOR (in my wife and my name) and we wanted to purchase a new PPOR and use the current one for the IP. What steps do I take for doing this??

Thanks for any replies.

 

[mitch]

Gday Voodoo,

my wife and l have done this twice in Vic in 1993 and 2000.

1/ Put your ppor into one persons name,you or mrs V ,it dosnt matter.There will be some legal costs but in Vic no stamp duty is payable on transfers between spouses(at least in 2000)

2/ Mr V buys the ppor of mrs v "at arms length" that is at fair market value , not an inflated price.

3/Mrs v takes her cash (cgt free) and buys your new ppor and you top up that money with a non deductable loan if you require more money.

4/With your new house (your old ppor) now a renter ,the loan you got to buy it of mrs v becomes deductable becouse you borrowed the money to buy the house (old ppor) as a renter.

Two points to rember,

lt dosnt matter what you have used for security or if both your names apear on the loan docs just as long as the loan is to buy a property to rent.

Thats a simplified version and of course you will seek legal advice and not take my word for it as l have no formal qualifications to give financial advice to anyone.


MITCH

 

[Brojac]

Hi Voodoo.

Get in a quantity surveyor to value your current PPR before you rent it. Any captial gains you have made on the property whilst it was your PPR is tax free. After you rent any CG is subject to GC tax (yuk)! The Q S will also help with your depreciation schedule.

If you own the PPR now and your new PPR will have debt on it, is this correct? If so this is not the ideal situation as you will then also pay tax on this income. You want 0 debt on your PPR and AMAP (as much as possible) on your IP. How you do this is between you and your bank! Or buy another IP to balance this out.

Do you or Mrs V make the most money each year? This answer is needed to help you further. If you want to negative gear a propery then you must be paying tax to do so.


In QLD to transfer names is subject to stamp duty and a WOFTAM (waste of f----ing time and money). Perhaps look at trusts ? I am not sure of this point see your lawyer!

You will notice every scratch and ding in your old PPR be prepared for this is it heart breaking. We ended up selling because of this. Take heaps of photo's so you can prove damage and it is not just your feelings involved.

Hope this helps.

Brojac

 

[voodoo]

thanks for the info Mitch and Brojac, sounds interesting.