Confused ip to ip/ppor

I have a fully owned ip (I can take out $150k) but have never had a ppor. I finally have some serviceability for up to $550k and now want to buy a 2 bedroom place (worth $550k) where I can live in one room and rent the other out.

What is the best way to manage this? I have read through some past threads but have got quite confused.

-how do I use the $150k as a deposit for my new place?
- and can I claim half the interest as investment?
- I know there will be capital gains implications but I can't otherwise afford to live financially comfortably without sharing.

Super confused. Spoke to a generic broker who has made me even more confused who seemed to not give the best advice. Thanks in advance for the help.

 

The loan part is easy - it's just a simple cash out secured by the IP, (loan 1) and then getting a separate loan for the PPOR purchase. (Loan 2). They can be with the same, or different lenders.

Normally the funds used to purchase a PPOR won't be deductible, but if you lease out a room it might be as long as you have a formal lease agreement in place and claim the income through your tax as well. Check with an accountant on that one.

Be careful using a generic broker - there's a pretty good chance you'll end up with a poor structure and cross secured properties.

 

In the new place, it might be better, rather then "rent the rooms out", to have "boarders" who contribute to the running of the household. You won't pay tax on the "rent", but conversely, you won't be able to claim any expenses against your income tax. Furthermore, it won't impact on your CGT position.

Suggest you need to model both options, preferably with a friendly accountant.

 

What @Jess Peletier said. get a property savvy broker. ask if he or she invests in property and how she/he structures her/his loans and why.

 

Best to get some tax advice too.

See
Strategy: 11 Strategies for when you move out of the PPOR and keep it https://propertychat.com.au/communi...n-you-move-out-of-the-ppor-and-keep-it.11311/

 

Thanks everyone!