Hello Forum members,
Long time follower and first time poster. I would value your advice if possible for the below scenario:
- Investment Property 1 (Value: $420K):
Loan 1: $227500 (I/O) fixed
Loan 2: $55000 (I/O) fixed - Split loan for Investment Property 2
- Investment Property 2 (Value: $390K):
Loan 3: $221000 (I/O) fixed
As we are currently renting our home, we have made the decision to sell property 1 (CGT exempt as per the absence rule) and purchase our PPOR. My concern is the following: Upon selling the 1st investment property, the bank will retain the required funds to pay loans 1 and 2, hence I would miss on the interest deduction component relating to the $55000 as the debt is no longer there. Should I structure the loans before commencing the sales process?
What possible screnarios would you recommend to address the above situation and rightfully claim the interest component of the investment property?
I thank you all for your time,
Gaby
Long time follower and first time poster. I would value your advice if possible for the below scenario:
- Investment Property 1 (Value: $420K):
Loan 1: $227500 (I/O) fixed
Loan 2: $55000 (I/O) fixed - Split loan for Investment Property 2
- Investment Property 2 (Value: $390K):
Loan 3: $221000 (I/O) fixed
As we are currently renting our home, we have made the decision to sell property 1 (CGT exempt as per the absence rule) and purchase our PPOR. My concern is the following: Upon selling the 1st investment property, the bank will retain the required funds to pay loans 1 and 2, hence I would miss on the interest deduction component relating to the $55000 as the debt is no longer there. Should I structure the loans before commencing the sales process?
What possible screnarios would you recommend to address the above situation and rightfully claim the interest component of the investment property?
I thank you all for your time,
Gaby