Loan advice for new IP - confused with PR loan

[amsuto]

Loan advice for new IP - confused with PPOR loan

I originally had my now primary residence rented out for 12 mths. It was purchased on an investment interest only loan. I currently have no IP's at the moment but now want to look at getting one.

Question is I have a good equity on this PR and it is still under original fiance with most of equity available and is still setup as investment loan.
To purchase new IP:
1. Can I use equity from PR loan as deposit and claim it?
2. Can I use my equity on PR to purchase IP and claim expenses of the loan under that of IP or do I have to take out new finance for this IP.

I have had different advice from bank/accountant.
Any advice appreciated, apologies if this is already on a thread somewhere, I have just logged on after a 2 year break. Thanks

 

[Paul@PFI]

I originally had my now primary residence rented out for 12 mths. It was purchased on an investment interest only loan. I currently have no IP's at the moment but now want to look at getting one.

Question is I have a good equity on this PR and it is still under original fiance with most of equity available and is still setup as investment loan.
To purchase new IP:
1. Can I use equity from PR loan as deposit and claim it?
2. Can I use my equity on PR to purchase IP and claim expenses of the loan under that of IP or do I have to take out new finance for this IP.

I have had different advice from bank/accountant.
Any advice appreciated, apologies if this is already on a thread somewhere, I have just logged on after a 2 year break. Thanks

Important point to remember is that it doesnt matter what the loan security is. If you borrow money the interest etc is deductible if the purpose of the borrowing is to acquire an IP. The intrest would be deductible against the IP. So in your case the IP would have a interest deduction ...not the home.

The deduction commences when the IP is available for rent. You may need guidance on when the interest deduction will be capital and when it is deductible

 

[Terry_w]

Bank staff cannot give tax advice so just disregard what they say.

 

[amsuto]

Important point to remember is that it doesnt matter what the loan security is. If you borrow money the interest etc is deductible if the purpose of the borrowing is to acquire an IP. The intrest would be deductible against the IP. So in your case the IP would have a interest deduction ...not the home.

The deduction commences when the IP is available for rent. You may need guidance on when the interest deduction will be capital and when it is deductible

Thank you for the classification Paul. You have made this much clearer for me. Much appreciated.

 

[amsuto]

Bank staff cannot give tax advice so just disregard what they say.

Shall certainly be more wary of them now! Thanks.