- CornelBassonParticipant@cornelbassonJoin Date: 2003Post Count: 62
I am about to rent my first IP out in the next 2 weeks, My question is do I keep that as my primary place of residence or do I change it to the place I will be renting. Also I want to get all my equity out of this unit and stick it in the bank about 70k, I have only had the place for 5 months will I get charged cgt on the equity I take out….what is the best way of going about this?
Thanks teamJas_2Member@jas_2Join Date: 2001Post Count: 9
easiest way is to work out what you need for non-income purposes and get two loans (one fore around 13K, and the other for the rest). that way accounting at the end of hte year is simple.
Why do companies offer you “free gifts?” Since when has a gift NOT been free?TerrywParticipant@terrywJoin Date: 2001Post Count: 16,213
Since you have been living in your property, you could probably continue to class it as your main residence even tho you are living elsewhere. you can do this for 6 years as long as you do not class any other property as you main residence at the same time.
You could withdraw equity form you property and put it in the bank, but why? You would be lossing out as you will be charged around 7% interest, but will only be getting around 5%. You may be better off to leave it there until you need it. maybe set up a redraw facitlity now to get it all ready. You may also not be able to claim the extra interest on this as a tax deduction-depending on what it is eventually used for.
You will not be charged any tax on the equity that you borrow because it is not income, just borrowings.
Discover Home Loans
[email protected]CornelBassonParticipant@cornelbassonJoin Date: 2003Post Count: 62
I want to use my equity to pay my car out and wipe a credit card…but that’s only about 13k that I will need…..so maybe I just need to take out a bit. What about refinancing my loan once the place becomes a investment property. I have a fixed rate at the moment for one year till Sep this year. Can I change the loan to a investment loan or do I have to wait till the one year is up.
What will be the best way to structure this so I don’t get hit with a huge tax bill.
ThanksStill in SchoolMember@still-in-schoolJoin Date: 2003Post Count: 1,844
Can you get on msn, ill chat to you there? Sorry about last night was asleep.
sisTerrywParticipant@terrywJoin Date: 2001Post Count: 16,213
You can use the money to pay for those (or anything), but the interest on this portion won’t be claimable. It doesn’t matter when you take the money out as the ATO goes on the purpose of the money. You can still do it tho, just don’t claim it.
Discover Home Loans