I'm thinking of building a granny flat to move into it, and rent out the main residence. Cost of granny flat: say 120k Rent from main residence: say 800 per week Questions: Is it possible to borrow the 120k using the rental income alone, assuming I have enough equity to borrow against? I have no more capacity to borrow using my own income. Any implication on land tax? Any implication on capital gains tax? Is this a good investment strategy? Thanks in advance for your help.
Check with your accountant. If you borrow $120K to build a granny flat for you to live in, I reckon the interest will not be tax deductible. Marg
