Investment and protection strategy

Discussion in 'Investment Strategy' started by SDWS, 18th Sep, 2017.

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  1. SDWS

    SDWS New Member

    Joined:
    18th Sep, 2017
    Posts:
    1
    Location:
    Sydney
    Hi All
    Appreciate any advise on this scenario.

    My PPOR (Property 1) $950k. No debt.
    Girlfriends home value (Property 2) $750k with $200k debit.

    Outcome required
    1 = keep both as IP's or minimum one IP, purchase new PPOR circa $2m.
    2 = Protect my initial capital of $950k, if we split as a couple.
    3 = Best tax benefits.

    Both current properties (property 1 and 2) income potential $650 each p/w

    Want to leverage both (or one) property to secure new loan for new PPOR.

    Should I sell property 1 and use funds for new PPOR at around $2m or remortgage both property 1 and 2 so they are slightly negatively geared and use the freed up funds for new PPOR purchase?

    Both of us earn decent salaries at $120k and $170k, with only the $200k debt. Could afford $6k repayments p/m.
     
    SDWS, 18th Sep, 2017
    #1
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,629
    Location:
    Gold Coast (Australia Wide)
    that re gearing in a staright forward way wont work for the tax guys - but please seek specific advice

    A spousal sale, a trust sale and an active debt recycling strategy may achieve the wanted outcome but will have some costs/risks

    ta
    rolf
     
    Rolf Latham, 18th Sep, 2017
    #2
  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,927
    Location:
    Australia wide

    Speak to a lawyer.

    Strategy 1 could be to sell 50% ppor to spouse who borrows to buy it. Could be no stamp duty and no cgt.

    Strategy 2.
    As above but then sell second 50% to spouse.

    Option 3.
    Sell to a fixed unit trust and borrow tonacqire the units. Could be done so no cgt and interest deductible and get a land tax threshold. I have a private ruling from ato and osr nsw confirming this for other clients.
     
    Terry_w, 18th Sep, 2017
    #3
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