I have a friend who owns 2 investment properties 1 worth $180k with $100k mortgage on it and the other which was her PPR but but now a investment property worth $280K which she owns with no mortgage. My question is.
Her tax accountant has adivsed her to sell the one with no mortgage on it to buy 2 other properties to save on tax for her $280k propety is this good advice or should she speak to someone different? It just dosn’t make any sense to sell of a property that is obviously making her money!
I would be inclined to get a LOC (line of credit) on the house with no mortgage. Then use this to get another IP. This way she can use as much as she is comfortable with.
How long has she been out of the PPOR because it may no longer be viewed as a PPOR by the tax dept.Pat
Take a huge bite and chew like mad.
Hi,
I’d definitely be hanging on to both properties and using the existing equity to buy more property. If she sells the property valued at $280 she may be up for CGT, so she should check that out before she makes any decision. If I was her I’d be talking to one of the brokers on this site for advice.
Landt.Hi Devin,
On the face of what you have said it is apparent that your friend needs a new accountant as he/she seems to be only looking at the individual investment properties from a ‘tax’ point rather than considering the whole portfolio.
As others have said I would prefer to release the available equity and, if consistent, with your friend’s investment plans and debt/risk tolerance levels and ability to service additional loans – invest again.
Derek
[email protected]Property investment advice and researched property in quality locations available.
Yes, I would be getting a second and third opinion. The accountant may be suggesting she sell it as she may be able to claim the PPOR exemption (since she first lived in it) and it should therefore be tax free.
But even if tax free, there would be agents fees, solicitor fees, and then when she purchases again stamp duty, solicitor fee etc on the replacement property.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
Click below to email meTerryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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