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Dual key house loan splits

Discussion in 'Property Finance' started by hammer, 30th Mar, 2016.

  1. hammer

    hammer Well-Known Member

    Joined:
    28th Aug, 2015
    Posts:
    418
    Location:
    Darwin
    If a buy a 2 key house. Live in the main part and rent the granny flat out, can I treat the granny flat as an IP?

    Say floor space is 20% GF and 80% PPOR.

    Can I split the loan to have one PI loan of 80% of the value and a secondary loan IO for 20 percent of the value?

    The plan would be to treat the GF exactly like an IP.

    Does this kind of financial setup work or is legal?
     
  2. Marty McDonald

    Marty McDonald Mortgage broker

    Joined:
    22nd Jun, 2015
    Posts:
    228
    Location:
    Sydney North Shore and Norther beaches
    Yes you can do that. Or you could do 1 I.O. loan and apportion interest based on the % that is investment / granny flat related.

    Note when you sell there will be capital gains implications most likely in the same ratio as you have been claiming.

    You may need to get a written opinion from a valuer (someone??) about the % of the whole property that is attributable to the granny flat.
     
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,999
    Location:
    Sydney
    from a taxation point of view it is possible as well. There is a case involving a person who ran a business from home and they had split the loan into the separate portions. Seek tax advice before implementing this.