Restructure finance. Refinance home and IP.

[Easymonet]

From: Steve K.


I would appreciate advice on the following.
I have three properties, comprising two rental properties and one residential property that is my primary residence. I have mortgages on all of them, so the interest on my home is not tax deductible but the tax on the two rental properties is. As I have a good amount of equity in all of them, I am wondering if I restructure my finances so that the mortgage debt is shifted onto the two rental properties entirely, will the refinanced mortgage debt be entirely deductible?
(Incidentally I have been renting out my primary residence for the last 18 months so at the moment the interest is deductible - however I will be living there again soon.)

 

[Rolf Latham]

Reply: 1
From: Rolf Latham


Hi Steve

the answer is yes and no.

Under a standard arrangment of just shifting dent around I would say ultimately youd be busted during an audit. The ATO will follow the money trail so to speak.

BUT, there are some methods such as moving the assets into a trust etc etc that may be beneficial in your situation.

Suggest you seek professional structuring and thence mortage advice

ta
Rolf