Preparing PPOR for future IP

Discussion in 'Accounting & Tax' started by timetoact, 8th Dec, 2020.

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  1. timetoact

    timetoact Well-Known Member

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    I am currently doing a bit of work on on our retirement plan, we are 40 now and want to retire as early as possible but likely will be 60ish.

    As part of this I am looking at how our PPOR will become an IP once the kids leave home.
    LVR is currently 50%
    Are there any tax issues with refinancing our home at some stage to max out LVR while it is still our PPOR in preparation for it to become an IP?

    Thanks
     
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    That is ineffective. The USE of borrowed money determines it deductibility. For example if you have ever drawn down on the home for a holiday, car etc then a portion of the existing loan wont be deductible already. Increasing the loan is not a way to enhance deductions unless you improve the home using borrowed money.
     

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