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Renting out current house and buying another

Discussion in 'Accounting & Tax' started by Samj, 31st Mar, 2016.

  1. Samj

    Samj Well-Known Member

    14th Mar, 2016
    We are planning to rent out our existing property and buy another property for living. I’ve talked to the bank where we have our current mortgage and looks like the procedure is quite difficult. I am just wondering if any of you have encountered a similar situation. Our current situation is that current mortgage and title on mine and my wife’s name. Currently my wife is working casual/part time and doesn’t earn much money. Below are the things I would like to have ideally and not sure if it is possible. I guess this is fairly a common scenario and wondering if you have any similar experiences.

    1. Take this mortgage (investment) ownership under my name for tax purposes.

    2. I want to increase the current mortgage to 90% of the value and use that founds for the next property which will be OC. And then use that full 90% for tax deductions.

    I think I’ll have to talk to an accountant and may be to a solicitor before proceed. Before that I am just wondering if this is possible at all..

    Thank you guys!
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    18th Jun, 2015
    You can't always get what you want.

    1. You are confusing mortgages and loans. but you won't be able to claim all the interest on the loan if you are not the sole owner.

    2. You want to increase the loan - which you may be able to do, but deductibility depends on the use of the money. Sounds like you want to use the money to purchase the new main residence and if this is the case the interest will not be deductible.

    Tax Tip 77: Redrawing Extra Repayments to Increase Deductions? Tax Tip 77: Redrawing Extra Repayments to Increase Deductions?
    legallyblonde likes this.