how to structure if possible

Can I ask how it would be possible and what structure would you use.  If you currently own 1 PPOR and 1 IP. But you want to purchase another PPOR but first rent it out until you can afford to move into it.

Would you have to cross all the loans to get the deal through? 

What if you wanted to transfer your existing PPOR into a Trust and take out all the equity and transfer it to your new PPOR so as to reduce your repayments. What type of Trust would you recommend just in case it is negatively geared.

Thanks for input.

Hi

You don't have to cross collalteralise the loans. You could set up a LOC on one property and use this as deposit for the new one, borrow 80% of the new one as a separate loan. All loans can even be at different banks.

You could transfer the existing house to a trust. But this would result in stamp duty and legal fees as well as possible loan exit fees and app fees again. You would also need to re-qualify for the finance.

Trusts losses cannot be used to offset your other income. A way to do it though would be to use a unit trust and borrow to buy the units. But this will leave you in a very inflexible position little different to holding the property in your own name. No tax flexibility and no asset protection.

I think it best to look at using a discretionary trust and then rolling over the losses - which should be minimal in this climate - and/or look at ways to divert other income into the trust to use the losses and save you tax.
Whether this is beneficial or not will depend on your circumstances. You will need to weigh up the costs to do this with the tax savings.

Terryw
Finance Broker
Solicitor

Thanks Terry nothing is easy that's for sure. 

Hi PosEnterprises,
As Terry has mentioned, your loans do not need to be cross collateralised. Provided you have sufficient equity in your initial PPOR a LOC could be established to be used for the deposit and purchase costs of your next purchase. The finance for the purchase of your future PPOR would be treated as IP loan where you can use the expected rental to assist with servicing the loan.
From the ownership structure side of things, the best person to advise you of that would be your accountant.

Michael Kimbel
Property Investing Finance.com
Financial Sense for Investors
Melbourne, VIC.
Ph: 1300 848 781
Fax: 1300 868 781
email: michaelk@propertyinvestingfinance.com