All Topics / Finance / Refinancing a previous PPR to get maximum -ve gear effect

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  • Profile photo of bardonbardon
    Join Date: 2004
    Post Count: 557

    I was just about to refinance a previous PPR that is now IP into a Hybrid Trust at 100% finance to get maximum -ve gearing effect.  My accountant has just advsied me that the Trust Deed is under scrutiny with ATO and doesn't advise me to transfer the property into it.

    The property is currently joint name me and wife I have no problem paying stamp duty on transfer I receive income wife doesn't, does anyone know another way of achieving maximum -ve gear ?

    Profile photo of TerrywTerryw
    Join Date: 2001
    Post Count: 16,213

    You still may benefit from transferring to a trust as this will free up funds which can then be used to pay off the new PPOR loan – if you have one. If you use a discretionary trust it may be that there is a loss which cannot be offset against personal income, but can roll forward to future years. Additionally you may be able to divert other income into the trust to offset the loss.

    Another option is, if you own the house jointly, you may be able to buy out your partner, borrowing to do this. In some states transfers between spouses may not attract stamp duty.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide)

    Profile photo of Richard TaylorRichard Taylor
    Join Date: 2003
    Post Count: 12,024

    Terry, Regretfully Qld is not one of those States.

    A Unit Trust appears to alleviate the initial issue.

    Richard Taylor | Australia's leading private lender

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