Hi,

I'm hoping for some help on these questions that's been bugging me.  We lived in a house for 3 years, then built a unit at the back.  Before the back unit was completed, we built and moved to a 3rd house for good.  The back unit was rented after it was completed, and the front house was rented out after we moved out (both in the same financial year, if that's relevant).  My questions are:

1)  We intend to sell the front house some time in the future, does the 6-year rule for CGT exemption apply to this?  If not, how do I determine as part of the cost base the front house's share of the original purchase price (which includes the land the new unit is now sitting) and the cost of new common driveway?  If the CGT exemption applies, I don't have to worry about cost base or valuations of front/rear house, is that right?

2)  There is only one loan for original purchase and construction of new unit.  For the proceeds of sale of the front house, can I use it (in full or part)  to pay off the loan of the 3rd house (assuming the LVR ratio on the new unit is sufficient), and still claim as tax deduction the full interest of the unit's loan balance?   What's the best thing to do?

Thanks in advance for your help.

I want to change my ppor into ip, I went to the bank and after 2 weeks they came back and told me that since my loan is over 80% (is currently at 83% ) that I will have to either pay for mortgage insurance again or pay out $14000 to get it under the 80% but that they also wanted to get the house reevaluated and that the house might be worth less and means I cant get the intrest only loan anyway. I have the $14000 sitting in an offset account but dont really want to pay the loan off as we are saving for another investment property.
We most likey move out before march/april next year but seems kinda pointless to pay the princle off now when later we dont want too to save money on tax when it is an IP.
Is the bank just screwing us around or is this standard ?
What type of option are avaible to us? Should we be looking at changing loans to someone that know what we want or just pay the money off and change it over. Not really sure what to do and dont want to make a silly move that will cost us in the future

Hi guys,

Thanks for your replies.

So no one knows how or where to find investing partners?

Terry: I had two trains of thought.

First idea was the half the house would be bought as a wrap arrangement. So there would be no need to guarantee any loan.

Second idea was if the partner was in a good financial position we would create a business and get a new loan for the house under the business name. With both parties as 50/50 partners.

What did you mean by utlising future equity?

I forgot to mention that I have been investing in some sense for a few years. I don't know a lot but I know enough to know that two heads would be better then one. I am really keen to get into a partnership so that I can keep investing and grow a decent property portfolio. So wether I sell or keep the house I am still looking for a investing partner or mentor.

Cheers

Tom