Investment loan but PPOR for 6 months?

I'm currently reconsidering whether I want to rent out my house as soon as settlement occurs.

If I rent the property out immediately, I lose the full CGT exemption (partial only). However, if I live in the property for 6 months, I will be eligible for the exemption.

Has anyone taken out an investment loan, but used it as PPOR? After 6 months I will be renting the place out.

Will this cause any issues down the track with deductions etc.?

 

its the use of the funds that determines deductibility. Doens't matter what the bank classifies it as

 

Take out an owner occupier loan and live in it for 6 months then rent it out.

Make sure to go IO with offset.

Nope, as Terry said its the purpose of the funds that determine deductability.

 

Thanks Terry and Collin.

My issue with going owner occupier is that they won't loan me as much without rental income to support the loan.

Is there a way around it so I can get owner occupier rates from the get go ?

 

Are you living rent free? If you're renting, then the rent you pay reduces your serviceability. Often the servicing scenario between purchasing as OO or IP isn't very different as a result of this.

Even if you do have to purchase as an IP, many lenders will adjust the product and rate fairly easily if you move in there. This would give you a better rate and possible CGT exemptions in the future. You'll miss out on some stamp duty savings (purchasing as an IP instead of a PPOR).

 

Apply as an investor and then tell the lender you are living in the property on the day of settlement.

 

Then prob best not to purchase it as an owner occ with the intention to live in it.

The banks servicing calculators are in place for a reason - you don't want to find yourself overstretched when rates go north again.

Cheers

Jamie

 

Jamie has hit on an important point. Bank policy is there for a reason- if you cannot afford it on their calculations, it may mean that you'll potentially get yourself into trouble one day when rates increase.