Paid off my PPOR about to move into an IP

[geoffwong]

Hello, read bit and pieces here but still can't find an answer to my situation.

We have paid off our PPOR but still owe 80% for our IP (bought 2 years ago). We are about to move into our IP and make our current PPOR into an IP. (so a straight swap if you like)

Should I go to the bank and restructure the loans so that I give them the deed for the PPOR and borrow 80% off that to fill in the 80% off the current IP (soon to be PPOR)? so that interest is still tax deductible?

 

[hysterical]

Hello, read bit and pieces here but still can't find an answer to my situation.

We have paid off our PPOR but still owe 80% for our IP (bought 2 years ago). We are about to move into our IP and make our current PPOR into an IP. (so a straight swap if you like)

Should I go to the bank and restructure the loans so that I give them the deed for the PPOR and borrow 80% off that to fill in the 80% off the current IP (soon to be PPOR)? so that interest is still tax deductible?

Tax deductible is based on the usage of the money not on the property that is used to borrow it.

The money is used to pay off an eventual PPOR, so no, it is not tax deductible.

 

[MarkandTina]

Wouldn't you be better off to sell the PPOR (with no capital gains tax), use the money to pay off the IP you are moving into and with any spare cash reborrow to buy a new IP?

I'm no expert but that seems the right way to go about it.

 

[matto_]

is the money in an offset ( or have you actually paid it off)?

 

[Rolf Latham]

Hello, read bit and pieces here but still can't find an answer to my situation.

We have paid off our PPOR but still owe 80% for our IP (bought 2 years ago). We are about to move into our IP and make our current PPOR into an IP. (so a straight swap if you like)

Should I go to the bank and restructure the loans so that I give them the deed for the PPOR and borrow 80% off that to fill in the 80% off the current IP (soon to be PPOR)? so that interest is still tax deductible?

you may have to look at a sale : (

Either


1. to someone on market
2, To a unit or Hybrid Trust
3. Spousal total or part sale


None of those is particularly attractive since they all have some form of cost in the 10s of thousands, but a proper analysis may reveal one may be better than the other

I guess that at the time of taking yourPPOR finance, your broker/banker forgot to ask the the important question.........is this place ever going to become an IP ?


ta
rolf

 

[geoffwong]

is the money in an offset ( or have you actually paid it off)?

paid off. so I can't restructure the loan?

 

[Aaron_C]

You can restructure the loan but it won't change the tax deductibility.

 

[matto_]

could the OP do a variant of LOML (without the "living" bit) - use the current PPOR equity to buy shares, and then have the income from the shares assisting with the new PPOR payments?

 

[Rolf Latham]

could the OP do a variant of LOML (without the "living" bit) - use the current PPOR equity to buy shares, and then have the income from the shares assisting with the new PPOR payments?

sure, thats one part of a debt recycle strategy.

Carries risk and takes time, which many arent willing to take on.

ta
rolf