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PPOR to IP

Discussion in 'Property Market Economics' started by TheSackedWiggle, 29th Jun, 2015.

  1. TheSackedWiggle

    TheSackedWiggle Well-Known Member

    Joined:
    29th Jun, 2015
    Posts:
    152
    Location:
    canberra
    Hi guys,

    What are the best practices to consider while buying a PPOR which will be IP in a year or two,

    #. Can the stamp duty and LMI be tax deducted? (esp in canberra region)
    #. Is it a good idea to go for 90 lvr instead of 80 lvr, if one is planning to convert a ppor into an IP in a years time?
    #. Loan Structure: IO with Offset?
    #. The time an IP in on market waiting for tenant can it expenses be tax deducted? how long can it remain on market without tenant?

    -thanks
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,937
    Location:
    Sydney
    Borrow 104% if possible.
     
  3. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,138
    Location:
    Canberra and Sydney
    Hiya

    Biggest factor (IMO) is IO with offset - just be careful with the lender you select because not all will offer IO against a PPOR these days.

    I doubt you'll be able to claim stamps if it's your PPOR straight away - I've never heard of anyone claiming stamp duty after converting their property into an IP in the ACT but would love to be told otherwise.

    LMI could possibly be deducted for years 3 to 5 (you'd have to ask your accountant).

    Borrowing 90% could make a lot of sense if you're planning on keeping the property for a long time.

    If it's being advertised and you're actively searching for tenants - I assume you could treat it as an IP for however long it takes to land a tenant. Again - hit up an accountant. Prob best to chat with one who specifically deals a lot with ACT properties as there are some small differences not applicable to others states.

    Cheers

    Jamie
     
  4. TheSackedWiggle

    TheSackedWiggle Well-Known Member

    Joined:
    29th Jun, 2015
    Posts:
    152
    Location:
    canberra
    Thanks again Jamie