Did the math, realised that depending on what the housing SA guy says, we could be $10-12k PA positively geared within a year of first becoming landlords, assuming someone gives us a loan and we keep the houses rather than sell. Amazingly, this would raise our household income to *above* the median
But - current house was bought at land value and then subdivided. I know for capital gains purposes, if we ever sell it the 'base' price for capital gains is only half what we paid for it (or more specifically fractionally under half as it wasn't quite subdivided into two equal halves, but that is splitting hairs).
My question is, is the interest on that 50% of purchase price that will be attached to the subdivided part of the property (once the forms are processed) still deductable if the original property becomes an IP? Subdivided part will become our PPoR late this year. Right now we have one loan for this property but we're waiting on various forms to go through for the subdivision, I assume what will happen in the end is it will remain one loan but with the two new titles as security - it is also secured by my old house - which is a nasty mix.
I'm suspecting it is not deductable and I'm opening up a x-colled mixed use loan accounting nightmare and our current house will be way more positively geared than we think it will be.
But - current house was bought at land value and then subdivided. I know for capital gains purposes, if we ever sell it the 'base' price for capital gains is only half what we paid for it (or more specifically fractionally under half as it wasn't quite subdivided into two equal halves, but that is splitting hairs).
My question is, is the interest on that 50% of purchase price that will be attached to the subdivided part of the property (once the forms are processed) still deductable if the original property becomes an IP? Subdivided part will become our PPoR late this year. Right now we have one loan for this property but we're waiting on various forms to go through for the subdivision, I assume what will happen in the end is it will remain one loan but with the two new titles as security - it is also secured by my old house - which is a nasty mix.
I'm suspecting it is not deductable and I'm opening up a x-colled mixed use loan accounting nightmare and our current house will be way more positively geared than we think it will be.