We bought a display home a few years ago which we were planning to move into when lease-back expires. We have received a notice of termination of lease and therefore we have to move in a few weeks.
We bought the display home using the redraw of our current PPOR as we were planning to sell our current house anyway when we move out but having seconds thoughts at the moment.
The problem is the that remnant debt is almost half of the current mortgage:
PPOR = Bought at 500K with 400K mortgage and offset account
IP1 = Bought for 799K (Display house) using 187K from PPOR redraw (current mortgage is 643K)
When we move:
New IP = 400K loan but only 213K is tax deductible (400-187K or 53.25%).
New PPOR = 643K loan with offset account
Rent will be around 550 a week and not sure of the depreciation (5 yr old newish 24sq 4-bedder), council rates around 1300. It's in Kellyville Ridge NSW near the hopefully-to-be-built Norwest Rail Link (and I mean HOPEFULLY
).
My questions are:
1. Is there a way to make the repayments on the whole 400K tax deductible again?
2. How much will be our annual loss compared to if we have the whole 400K tax deductible? I computed around 5K difference but not sure if my computation's right.
3. Better to sell now or to keep for this area with our current loan bungle?
Thanks in advance.
We bought the display home using the redraw of our current PPOR as we were planning to sell our current house anyway when we move out but having seconds thoughts at the moment.
The problem is the that remnant debt is almost half of the current mortgage:
PPOR = Bought at 500K with 400K mortgage and offset account
IP1 = Bought for 799K (Display house) using 187K from PPOR redraw (current mortgage is 643K)
When we move:
New IP = 400K loan but only 213K is tax deductible (400-187K or 53.25%).
New PPOR = 643K loan with offset account
Rent will be around 550 a week and not sure of the depreciation (5 yr old newish 24sq 4-bedder), council rates around 1300. It's in Kellyville Ridge NSW near the hopefully-to-be-built Norwest Rail Link (and I mean HOPEFULLY
).My questions are:
1. Is there a way to make the repayments on the whole 400K tax deductible again?
2. How much will be our annual loss compared to if we have the whole 400K tax deductible? I computed around 5K difference but not sure if my computation's right.
3. Better to sell now or to keep for this area with our current loan bungle?
Thanks in advance.
