The law is study is assessible at market rates. You can challenge the assessment with proof of market rate. Did you get a valuation done?

This has nothing to do with loans so if you want to refinance you will still have to convince the valuer of the new bank that your house is worth much more than you paid for it. Not easy.

If the property doesn’t make any income and you sell it after 10 years for the same amount you had paid for it then you would have lost money – and opportunity to invest elsewhere.

In that case you have to plan for it. What would happen cashflow wise for example – hopefully a rented property wouldn’t be costing you much money per week. How easy would it be for either of you to find a new job, how long would it take for example.

I have a friend with one unencumbered investment property and a main residence at 80% LVR, yet he is terrified of ‘risk’. He won’t invest at all. He only ended up with a new main residence because of moving interstate for work.

I also know people who are buying their 5th property on 90% LVR loans. Much more risky yet they don’t worry (openly any).

I would suggest you be careful if buying a small studio under 45-50sq m, Harder to get finance means harder to sell which could restrict growth.

Hi Wilko,

The ATO has indicated in a few publications that a spouse borrowing to buy the interest of another spouse can claim the interest where the property is or will be an investment property.

But it is easy to get this wrong and not be able to claim the interest. There is a thread on another forum in which the poster was boasting how they did this – but his spouse had gifted her share of the property to him. You cannot borrow to ‘buy’ a gift and claim the interest!

Only lawyers can advise on structures. Accountants can only advise on the tax aspects. A trust is a pure legal thing – person A promising to hold property for person B under whole bunch of conditions stipulated in a deed.

No minimum time period is specified in the legislation. Must genuniely make the property your main residence.

It all depends on the circumstances. Borrowing costs are generally deductible over 5 years but if the LMI is incurred on a PPOR secured loan which is increased to access the equity for possible future purchases then it possibly won't be deductible.

Normal situation applies. If the expense of rent relates to their making of income it could still be deductible.

Residential Tenancy Act

Redrawing is treated as new borrowings. If you borrow to fund living expenses the interest will not be deductible and you will end up with a mixed loan. Interest must then be apportioned and it will be impossible to later pay off the non deductible portion first.

Split the loan first.