Hi,
I have an interesting tax deduction question which needs clarification.
I have a property in St Kilda that was my PPOR. I used its equity of $290k to create a Line Of Credit to purchase another house that I rented out for a period of time. I have the title to the IP and it has no connection to the LOC. I have now moved into my IP and call it my PPOR.
The debt in the LOC includes the payout of my old mortgage on St Kilda of $25k the cost to buy my IP of $167k and a new car for $25k - total debt of $217k is against the ST Kilda property. My question is - If I rent St Kilda out what amount of monies can I claim as debt against the property? I have some people telling me the entire amount of the LOC that is outstanding = $217k while others say only the old mortgage value of $25k????
This is further confused by the scenario of - if I have the St Kilda property revalued to a greater amount and increase the value of my LOC is there any connection anymore with my old mortgage amount of $25k or is the actual overall debt against the property the figure to use.
Who has a clue to this one?
thanks,
Trevor
I have an interesting tax deduction question which needs clarification.
I have a property in St Kilda that was my PPOR. I used its equity of $290k to create a Line Of Credit to purchase another house that I rented out for a period of time. I have the title to the IP and it has no connection to the LOC. I have now moved into my IP and call it my PPOR.
The debt in the LOC includes the payout of my old mortgage on St Kilda of $25k the cost to buy my IP of $167k and a new car for $25k - total debt of $217k is against the ST Kilda property. My question is - If I rent St Kilda out what amount of monies can I claim as debt against the property? I have some people telling me the entire amount of the LOC that is outstanding = $217k while others say only the old mortgage value of $25k????
This is further confused by the scenario of - if I have the St Kilda property revalued to a greater amount and increase the value of my LOC is there any connection anymore with my old mortgage amount of $25k or is the actual overall debt against the property the figure to use.
Who has a clue to this one?
thanks,
Trevor