Dilemma on selling IP to purchase PPOR

Hi guys

Hoping to get some advice.
We are unsure whether it would be better to be paying interest on loan for PPOR or selling IP to fund purchase, thereby saving the money paid to interest.

Details are as followed:

PPOR currently own 50%
$800K needed to purchase remaining share
Plus $300K needed for renovations
Total value of property $1.6M current after Reno $2M+
Current loan $360K with offset funds of $220K
Investment loan $340K Both guaranteed on house

IP1
Value $800K
Rent $24K net pa
No loan to pay


IP2
Value $650K
Loan $490K with $110K further funds available to draw
Rent $16K pa


Q1
Should we sell IP1 to fund PPOR to save interest payments to accumulate funds?
(Repayments can be made on new loans should we have to make ends meet)


Q2
Sell IP2 to reduce loan amount
(Possible 2 townhouse development site which we initially bought it for but would now need to hold off due to purchase of PPOR...unless we can get funds for that too which would result in $230K profit)


Q3
Best structure for loan set up for above situation ?

Any other ideas would be greatly appreciated

Thanks in advance

CASE

 

Are you only considering the income tax aspects?

What would the CGT amount be on the sale of the IP?

Do the same persons own IP1 and 2 and the PPOR?

have you considered selling to a fixed trust which you control? And borrowing to acquire units?

What would the stamp duty be if you sold either IP to a spouse or related entity?

Are they preCGT properties?

Any asset protection considerations?

 

Income tax would be higher if we took out new loan.
We are advised, no CGT on IP1 as we lived in in for 3 years up to last year.
PPOR is in husbands name, to go in both names after full purchase
IP1 and IP2 are in wife's name.
Don't know if SD payable if sold to spouse.
All acquired in last 9 years.

 

what state are they in?

 

Victoria

 

You are lucky there. Property can be transferred between spouses, for full market value, with no stamp duty.

What if the wife sold IP 2 to the husband, for market value, and the husband borrowed to acquire it. The wife could then use the proceeds from the to pay down the new PPOR loan.

Make sure you get legal advice and tax advice.