All Topics / Finance / Two separate LOCs vs one LOC to pay deposit and acquisition costs

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  • Profile photo of YuriYuri
    Participant
    @yuri
    Join Date: 2010
    Post Count: 1

    I am thinking to buy an investment property. I am about to set up one LOC, using equity of my PPOR, to pay both: 

    • A) 20% deposit of investment property purchase price and
    • B) all acquisition costs (like stamp duties, title search, solicitor fee, etc.) 

    Can you advise me, please, is there any advantage in setting up two separate Line of Credits  (LOC1 for A, LOC2 for B) ?!

    Profile photo of LHLH
    Participant
    @lh
    Join Date: 2010
    Post Count: 97

    Hi Yuri,

    Good to see you're using the equity in your home to further your own wealth and best of luck with the journey.

    You can set up two accounts but there's really no need. In some cases (say with St George) you can set up a single line of credit (Portfolio account) and have several sub-accounts under it. Best to have these set as I/O (and capitalising if you wish), while continue to put your remaining capital into your PPOR.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    From a tax POV I don't think there is any real need to keep these separate.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

Viewing 3 posts - 1 through 3 (of 3 total)

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