What happens to equity when you sell?

[tpepper]

Hi everyone
I have a bit of a scenario that we have emailed our accountant but he hasnt got back to us as yet and we have some reno bills to pay....

we used 20k from "property x" to buy "property y", a few years later we are selling "property y" to capitalise on the market and to bulk our deposit for our ppor. we were thinking of using equity from another investment "property z" to pay for break fees (yes we fixed at 5.2 % in 2013 ) and also some reno costs for "property y"

this could further increase our deposit - if that makes sense

what happens to that equity when we sell "property y" do we need to pay back that original equity deposit and reno costs or can it sit there?

thanks

 

[Terry_w]

once the income earning asset relating to the loan is gone you can no longer claim the interest (with some minor exceptions).

 

[tpepper]

once the income earning asset relating to the loan is gone you can no longer claim the interest (with some minor exceptions).

thanks terry

do minor exceptions by any chance include deposit, reno costs or break costs?

 

[Terry_w]

thanks terry

do minor exceptions by any chance include deposit, reno costs or break costs?

Not unless you are selling at a loss.

 

[tpepper]

Not unless you are selling at a loss.

thankfully that is not the case... thankyou for your response I really appreciate it