Buying a new home and renting out current home

Discussion in 'Loans & Mortgage Brokers' started by Skyhighlimit, 21st Jul, 2020.

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  1. Skyhighlimit

    Skyhighlimit Well-Known Member

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    I’m in in the process of upgrading to a newer and bigger home and renting out the current house (no debt on the house), and starting the investment property journey when able to serve more loans. The broker suggested to go with one of the big 4, and told me can’t have an tax deduction on interest. Because I will be living in the new property.
    I have picked up a few interesting words here eg debt recycling. I wonder if there is a strategy that people in the similar situation eventually have tax deduction on the interest they pay?
     
  2. willair

    willair Well-Known Member Premium Member

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    Maybe have a talk to your Accountant first or read as much as you can from this site as there is a way around this and welcome..imho..
     
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Active dr can help, but is slow compared to a spousal sale or sale to a unit trust, needs specific tax and credit advice.

    ta

    rolf
     
  4. Trainee

    Trainee Well-Known Member

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    If you borrowed money to buy your current house in the past, a simple offset account could have solved this.
     
  5. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Indeed..........Hindsight is a wonderful thing.

    Many folks feel their home will be their "forever home" and therefore dont see value in a higher cost product with offset.

    LIfe changes ................

    That small interest rate margin can be considered as a form of "change of mind or life circumstances"

    Part of these challenges is that many clients need a guided discovery process to flesh out future issues, rather than just product fulfillment.

    ta
    rolf
     
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  6. MC1

    MC1 Well-Known Member

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    So simple, but so many people don't get it
     
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  7. Skyhighlimit

    Skyhighlimit Well-Known Member

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    I was one of the many people like the ideas of being debt free so the house was paid off using the gifted money... the mortgage was discharged.
    Hindsight is a wonderful thing with regret.
     
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  8. Lindsay_W

    Lindsay_W Well-Known Member

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    Or even know about it, "you don't know what you don't know"
     
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  9. Lindsay_W

    Lindsay_W Well-Known Member

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    At least you know now and you're looking for a solution
     
  10. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    This may be of interest:
    upload_2020-7-23_21-20-0.png
     
    Propgoat likes this.

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