Why are you paying interest with the LOC? Whether it is deductible or not will depend on a few things. At the very least you should get some tax advice.

"Pulling funds out" worries me. Withdrawing from a loan is creating a new loan. The interest on this new loan will only be deductible if the bororwed money is used for investments.. If this is…[Read more]

If it is one title then you would need to apportion your loans accordingly. ie. you can't artificially have all the debt on the investment portion and none of the other portion.

Check with your accountant about deductibility of interest.

And banks split loans all the time so you shouldn't have a trouble from this end.

Not that i know of.

You could split the loan on purchase. But you couldn't attribute more than a fair split to the investment portion.

There certainly is a risk.

Speak to a lawyer about priority of interests in land. Generally first registered legal interest takes priority over later interests. But this is a complex area. You would register a caveat on exchange due to you obtianing an equitiable interest.

Depending on the state and the structure of the option there could be…[Read more]

Why a LOC on the property? This could be dangerous.

I agree with Shape – doesn't really work in practice. Personal loan will be short term, high rates and PI. It will hurt serviceability. It will also be hard to find a lender – not impossible though.

getting a quick and higher revaluation is also not easy.

Make sure you get legal advice – don't use a conveyancer for this sort of thing as there are many issues.

mthommo82 wrote:
I purchased my PPR in 2010 and didnt open up an offset account. I proceeded to pay excess money into the account not knowing there was a difference between redraw and offset. In 2011, I then brought an IP and used money from the redraw facility to pay for the deposit, stamp duty ect. I now read that this redrawing has changed…[Read more]

Yes, not a good idea. As a business you are entering contracts and there are other potential liabilities so if the company is sued the house is at risk.

Also a company doesn't get the 50% CGT discount either.

Look into trusts.

It is, but what was the company formed for?

And why would you want to buy in the company?

I don't understand, so will use an example

$600,000house
$200,000 loan
= $400,000 equity

80% of house value is $480,000. Less $200,000 existing loan = $280,000 useable equity. You could possibly set this up as a LOC.

If you are purchasing a $600,000 commercial property this LOC would be used as the 20 or 30% deposit and then you borrow the rest…[Read more]

Many issues.

First determine what effect this will have on their pensions.

Then if you were to buy part of the house, what about accessing equity down the track – all owners must go on loans. If it is a rental then no PPOR CGT exemption for you and what was once fully exempt becomes partlially exempt.

Stamp duty on the transfer.

Estate…[Read more]

yeah, request a copy of the survey report.

As far as I know there are no land tax exemptions In VIC for land owned by a company – even when the sole shareholders are living in the property.

If the company was acting as trustee then this is different – depending on the trust.

Possibly. Depends on the LVR of your home.

Thanks Richard.

Yes you could have an option to purchase part of a property. There are many ways to structure the option and strike price. could be based on an average of 3 valuations, cPI increases or some round figure. cost to prepare an option agreement would be around $2,000 to $3,000 plus disbursements and GST.

Chris-Syd wrote:
Can I use Rent from an IP to paydown PPOR Home Loan?

Currently have IP Rent coming in. This is going into an IP LOC.
Can I use this instead to paydown my PPOR Loan and let the IP LOC incerease?

Is this allowable with regards to TAX?
Will the interest on the IP LOC be tax deductible even with it increasing?

This is a…[Read more]

Richard – what was the record number of properties securing one loan?

It generally couldn't be financed (under housing loan) unless it become a non removalable home. Any wiff of it being able to be removed naturally worries lenders.

Vincent8 wrote:
Hi all,

Many thanks for your helpful replies – I appreciate it. I did double check this with my mortgage broker today and you are all right, he was trying to cross collateralise.

I told him I didn't want this, so he will get back to me with other products where this can be avoided. However, he did advise that I may lose out in…[Read more]