Debt Recycling Questions

Yes it is.

Just borrow against house and lend to trustee which then invests and distributes to you or spouse for you to pay down non deductible debt so you can borrow further.

I think I have written a tax tip on this.

 

Thanks so much @Terry_w, very much appreciated.

Out of interest, do you remember which tax tip it was? Not a problem if you don't, am sure I'll find as I read through your many tips!

 

Sorry I don't. Not at my computer ATM. If you can't find it let me know.

 

i think this is it. if there is another you had in mind, please let me know.

Legal Tip 151: Structuring the Ownership of Shares

thanks again @Terry_w

 

No that is not the one I was thinking of. I think I have written it as a draft but not yet posted it. I will put it up soon.

 

Here is the one about using a trust and recycling debt

Incorporating a Trust into a Strategy Recycling Debt Incorporating a Trust into a Strategy Recycling Debt

 

fantastic. thanks so much @Terry_w

 

What happens when you pay off your house loan?
For example, you have a 200k loan against your PPOR and over the years you pay this off and then recycle it so that you have a 200k loan that has been used for shares.

What would happen if you sell the house? Would you be forced to pay off the 200k loan that has been used for shares as you no longer have the house as security?

Thanks

 

This is usually what would happen, although with some lenders you may have the option to secure the loan with cash until a new security is found. So for eg, if you were going to buy a new PPOR, you could secure the $200k with cash and then substitute the security when the time came.

 

Just have to change the security. If selling you might be buying again or you might have equity in other property.

The key is to plan in advance

 

Makes sense. Thanks guys