??? Using Equity to purchase a PPOR ???

Hi everyone,

I’m interested in purchasing a PPOR & trying to find out which way I should structure my finance for this purchase.:confused:

I currently have a PPOR & no mortgage on it, so no FHBG for me. My parents & I own this property & do not intend to sell; parents will continue to live here.

I also have 4 IP’s that I & wife own & currently are in total negatively geared at $7k per year (this is at current interest rate).

With my situation, what would you do if you were to buy a PPOR?

A. Use equity from IP’s to finance PPOR purchase
B. Sell the IP’s that have had capital gains.
C. Or other. ( please explain if other)

Now I know there will be a lot of tax complications since it’s not tax deductible, just wanted to know if anyone has figured out a way & have done this before.

Suggestions, advice?

You could use equity and purchase the PPOR and xcoll them or if you like you could use a loc and use this as a deposit and obtain another loan to 80% LVR and avoid LMI on that deal.

This also depends on any existing loans, more details would be needed to make a correct analysis.

Are you trying to get the new purchase to be debt free? Or convert the non tax deductable debt to deductable debt?

Not easy but have done it in the past, you can either sell a property and trigger a capital gains event or transfer the property into another structure, i.e. sell it to yourself (trust) but this also would result in CGT payable for the IP, not for the PPOR but all sorts of other issues come into play and really could make the whole thing non workable.

I did it once, sold my PPOR to my family trust, there were reasons and they worked at the time, would I do it now, NO. However life has changed.

Not sure if I answered your questions as you intended?


Alex Sperling
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I would talk to a good property accountant as the best way to do this will depend on many things including how the existing PPOR is held, your PPOR exemption and a range of items on your investment properties.

It's probably not what you wanted but spending a few dollars now could save you thousands in the long run to get it right.