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Buying as investment or PPR

Discussion in 'Accounting & Tax' started by Dylan33, 30th May, 2016.

  1. Dylan33

    Dylan33 Well-Known Member

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    Nsw
    we're moving at some point interstate and need to buy before we get there. We will probably need to rent it out for a while before we get there. Do we have to buy as an investment or can we buy as a PPR and still rent it out just for a short term?
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    If you rent it out it is an investment if you live in it it is a PPOR
     
  3. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    If you can show an employment contract, you may be able to buy as a PPOR - if you can't, they're going to wonder how you commute interstate for work.

    Bear in mind that many lenders don't love job insecurity, so buying as an IP may be best regardless. You can always get the loan changed once you're living in it.
     
    Paul@PFI likes this.
  4. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Agree with Jess - unless you can show that you'll be earning the same income in the new location - an application for an owner occ would prob be a no go.

    Some lenders only require a phone call/tick and flick form to change a loan from an investment to owner occ however.

    There's likely to be taxation/CGT considerations here - talk with a good accountant too.

    Cheers

    Jamie
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Just keep in mind what you tell the bank doesn't affect the deductibility of interest. It is the use and purpose the funds are put that that determines this. So you could have an owner occupied interest rate and still claim the interest if the property is rented out.