Forums / Getting Technical / Legal & Accounting / Convert IP into PPOR

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  • Profile photo of rudra_rrudra_r
    Join Date: 2009
    Post Count: 61

    Hi, I have an investment property which I’ve identified as one I would like to live in in the future. As such I would like to pay this IP down as much as possible prior to moving in so that when we move in the debt is smaller which is important for us as we will be starting a family then.

    My current situation is I have 4 IP’s (including the one I want to move into) plus another settling in the near future. The total rent across these properties is about $1700 per week (expecting to go up to $2000)

    One idea I had was to use all the rent to pay down this property and utilise equity in the other IP’s to pay their expenses (e.g. rates, insurance, interest), just until we move into this property. I’ve read a lot about capitalising interest and tax avoidance, so am wondering if I will need a private ruling from the ATO to do this even though it is not a PPOR.

    Your thoughts would be greatly appreciated.

    Profile photo of TerrywTerryw
    Join Date: 2001
    Post Count: 16,190

    Yes, you should get a private ruling.
    What is the purpose of you capitalising interest this way? Only for a tax benefit in the future.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide)

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