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  • Profile photo of troy.rtroy.r
    Participant
    @troy-r
    Join Date: 2022
    Post Count: 0

    Hi I have a IP that was a PPOR 3 years ago. When we moved out and changed it to a IP it was valued at $1,200,000 with a loan amount of $500,000. We are unlikely to move back in to it and are looking at purchasing a new PPOR.

    The IP is now valued at $1,350,000 with a loan amount remaining of $400,000. Is there a way take out the equity that was in the property at the transition point from PPOR to IP to fund the purchase of a new PPOR?

    Thanks.

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,416

    Hi Troy,

    I have a few thoughts, but I’ll step aside right now to see if others with the right credentials might stop by first.  (I don’t have any credentials – just opinions…)   Suffice to say, you sound like you are in a really good place.  :)

    Benny

    PS  While I think of it, there is one link I can provide that MAY hold some ideas around this subject.  It may not fit directly your situation, but it should at least give you some extra angles to explore….

    https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/page/3/#post-5037656

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

    You cannot take out equity, all you can do is borrow money. You can do this by using the property as security for a loan and borrow the deposit and stamp duty etc for the new property. But the interest will not be deductible because the deductibility is determined by the use of the borrowed money – which isn’t income producing in this case.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of troy.rtroy.r
    Participant
    @troy-r
    Join Date: 2022
    Post Count: 0

    Hi Benny,

    Apologies for the late reply/acknowledgement but thanks for taking the time to direct me to resources already here.

    Troy

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,416

    No worries Troy.  Was that link worthwhile in some way?   I know it was not a direct help, as you are looking at buying a PPOR anew.

    How did things go from your perspective?  Did you go ahead with drawing a loan against the IP?   It should have been a SEPARATE loan and not just an increase of any existing loan (to keep deductible and non-deductible costs from being mixed in together).

    Benny

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