Crazy situation. Help !

Hi everyone,

Thank you in advance with help.

My story is:

I have:

2 Bedroom Unit in Emerald QLD - PPOR ( Loan P+I @185K owning $185K) never valued but is around $310K

New house in Narangba QLD 4/2/2 ( Loan IO @ 447K) Split $400K 3 year fixed and $47 K variable. Never valued. Tenants paying $410

We are moving to Mackay next year and Emerald will become IP. Tenants ready to pay $500/week.

Both places are cross-colateralised with NAB :mad: and have Offset accounts attached.

The problem is that Emerald unit is Positively geared when Brisbane is negatively geared. I am not sure what to do ! I need strategy !

I am on $100K + so Negative gearing strategy make sence but I am not big fan of it.

We realy need a car in Mackay so my idea is to get equity from Emerald unit and buy a car and max loan to $240 K and make it IO so it is slightly Positively geared but I am not sure will ATO like this.

I know it's sounds like bad idea to get car in this waybut when I can buy outright but I have $40K in offset account that I want to use as deposit for new PPOR in Mackay with different lender.

I am open to any ideas because I stuck atm

Thank you
 
Last edited:
Hi everyone,

Thank you in advance with help.

My story is:

I have:

2 Bedroom Unit in Emerald QLD - PPOR ( Loan P+I @185K) never valued but is around $310K

New house in Narangba QLD 4/2/2 ( Loan IO @ 447K) Split $400K 3 year fixed and $47 K variable. Never valued. Tenants paying $410

We are moving to Mackay next year and Emerald will become IP. Tenants ready to pay $500/week.

Both places are cross-colateralised with NAB :mad: and have Offset accounts attached.

The problem is that Emerald unit is Positively geared when Brisbane is negatively geared. I am not sure what to do ! I need strategy !

I am on $100K + so Negative gearing strategy make sence but I am not big fan of it.

We realy need a car in Mackay so my idea is to get equity from Emerald unit and buy a car and max loan to $240 K and make it IO so it is slightly Positively geared but I am not sure will ATO like this.

I am open to any ideas because I stuck atm

Thank you

Your purpose will be to purchase a vehicle, not to invest so correct the ATO wont like it. For funds to be tax deductable the they need to be used for investment purposes not personal.
 
BRADY: thanks for confirmation.

Jake D: thanks for that but as I stated above I pay a lot of tax ~ 30K and if I keep things as they are I will pay even more.
 
First step first. Uncross NAB loans if you are able to, and at the same time get some money out to go help pay for the car (or get a cheap 0% rate etc from some of the dealers). Don't worry about the deductibility question so much as that is only a secondary consideration (although it is a pain). You can fix it over time by investing in more properties down the track but you can't make it go away overnight - so concentrate on what's more important.
 
First step first. Uncross NAB loans if you are able to, and at the same time get some money out to go help pay for the car (or get a cheap 0% rate etc from some of the dealers). Don't worry about the deductibility question so much as that is only a secondary consideration (although it is a pain). You can fix it over time by investing in more properties down the track but you can't make it go away overnight - so concentrate on what's more important.

Thanks Aaron C,

I would like to uncross but it will be painfull (around $8.5K) so I need to wait 2.5 years or change in interest rates ...

So I think I should not touch those two loans at all and use money from Offset account as deposit for new PPOR in Mackay with different lender.

Another idea from another forum was to use those $40K to buy car and get LOC for a deposit for new PPOR.
 
Thanks Aaron C,

I would like to uncross but it will be painfull (around $8.5K) so I need to wait 2.5 years or change in interest rates ...

So I think I should not touch those two loans at all and use money from Offset account as deposit for new PPOR in Mackay with different lender.

Another idea from another forum was to use those $40K to buy car and get LOC for a deposit for new PPOR.

NAB is able to release the securities for you without refinancing / incurring break costs. It all depends on the valuation of them and whether the manager handling your loans allows it. This will not cost as much as a complete refinance which would be a bit silly since you have a 3 year fixed loan.

I do think it is best if you just leave the NAB loans as they are (if you can't uncross them internally) and put your savings into another different account until you can make the next purchase.
 
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