Transferring equity from IP to HOME

Viewing 5 posts - 1 through 5 (of 5 total)

davidb
Member
@davidb
Join Date: 2003
Post Count: 10
January 11, 2004 - 3:03 pm
I have a home, 2 IP’s and a holiday house valued at 1,200000 – of which $500,000 is equity. How can I pay off our home?
Mortgage Hunter
Participant
@mortgage-hunter
Join Date: 2003
Post Count: 3,781
January 12, 2004 - 12:14 am
If you borrow money against any property with the purpose of paying down your PPOR then that loan will not be deductible.
One idea might be to make all of your deductible loans IO and direct app Principle payments into the PPOR.
Another idea might be too realise the profit on a IP and then pay down the PPOR. You can do this by selling the property. If you wish to keep it then consider “selling” it to another structure controlled by yourself.
Best to seek an accountants advice before embarking on this strategy!
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
melbear
Member
@melbear
Join Date: 2003
Post Count: 2,429
January 12, 2004 - 1:46 am
Definitely agree with Simon.
How much of the debt is your PPOR? Pay miminal payments onto all other debts, and direct ALL money to your PPOR until it is paid off. If the others are P&I, you could create a substantial amount of extra money to go towards your PPOR.
Cheers
Mel
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
January 12, 2004 - 3:12 am
I agree, you could borrow to pay off your home, but the interest on these borrowings would not be deductible. It may give you piece of mind tho, having a clear title on your home.
Another thing you could consider is selling one of your properties to a trust. This would release the equity, but you would be up for CGT and stamp duty, so the interest saved may not be enough to justify it.
Terryw
Discover Home Loans
North Sydney
[email protected]
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
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Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
redwing
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@redwing
Join Date: 2003
Post Count: 2,733
January 12, 2004 - 9:48 pm
mortgage hunter
Just read a bit about “CAPITALISING LOANS”, could this be helpfull or are the ATO getting rid of the practice..?
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”