turning PPOR into IP

HI,
To cut a long story short I have had to buy my house twice. After building an IP early and then moving and buying another house and selling for a good profit I was within sight of owning the original house when I geared into shares and lost the lot in the GFC. Since then I have been paying off a tax deductable investment loan secured by my house with zero asset to show for it. It sucked.

Anyway It's over. I own the house we live in. (or will do in a month or two)
Bank valuation $450k in a good suburb in townsville (worst house in an excellent street)

We have no other debt and are fairly frugal. I have a good income and have been paying 30K PA off the mortgage and we live off my salary. My wifes entire salary as a teacher goes into the mortgage (dunno how much - 4 days a week so approx 40 - 50k p.a after tax)

anyway once it's paid off we would like to top up super for a bit and eventually we possibly be looking to move into a new PPOR. We would also like to hang onto this one as there is good chance of more CG.

Is there any way I can borrow money for a new PPOR but have my debt in the investment property (this one). Do i really have to sell it at market rates and buy it back again at 90%LVR?

Is there some way to convert the equity of this house into a new house and have the mojority of my debt as investment debt?

Could I do something like retain this house as a PPOR while I borrow for another IP, and then move and live in the IP and rent this one while I do up the IP? (dont laugh) is the 6 year PPOR rule for capital gains mean i can live somewhere else for 6 years?

what would you do?

first post. lots of questions.:eek:
 
Deductibility is determined by the purpose of the loan not the security. So a loan for a Ppor can never be fully deductible (unless it's being used to generate income or to work from home etc).
 
Is there some way to convert the equity of this house into a new house and have the mojority of my debt as investment debt?

Not really. You could talk to your accountant about the possiblity of transferring ownership to a different entity - but there's costs involved (that's if it's feasible to begin with).

This is why interest only with an offset is the way to go. Here's a thread I started on the topic http://somersoft.com/forums/showthread.php?t=105176

Cheers

Jamie
 
I would start with personal advice from a tax person AND a mortgage broker. Your past circumstances may affect your borrowing ability.
 
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