Land subdivision and IP construction

Hi all,

I have this block of land 5200 m2. Part of it is used to build my own house. I am thinking of subdividing and using some 1700 m2 to build an investment property. Can this be done while the land is still under mortgage? The council will approve the subdivision as I have already checked with them. The land/ construction loan for my house is with ANZ. Will they be happy to finance the construction of the IP as well? Valuation for the PPOR and land will be around 800 000 with a mortgage of around 520 k. How can the transaction be structured so I can maximize the tax benefits associated with negative gearing? What is your feeling about negative gearing? Are they going to scarpe it in the near future?

Any ideas/suggestions/ help would be greatly appreciated.

 

The mortgagee must consent to the subdivision which they will as long as their security is enough for the loan.

Whether they will be happy to finance it or not will depend if you can demonstrate serviceability.

See
Tax Tip 93: Subdividing Property and Deductibility of Interest https://propertychat.com.au/communi...-property-and-deductibility-of-interest.6927/

 

Thanks Terry!