Seeking advice - buying PPOR; maximising tax deductible debt

Dear all,

Having been very much a novice in the past; I structured poorly in the future.

My situation is this:

1) Looking to buy a PPOR - probably under my spouse's name, jointly or my name. Probably better under my spouse's name. The plan is she will purchase as PPOR, with interest only loan with offset. We are likely to get a new PPOR in the next 2-10 years.

2) Currently has an Investment Property - under Ubank, redraw facility but no offset account. Its almost entirelly paid off

If I take money out of UBank to fund the new PPOR. I am effectively moving tax deductible debt into non-tax deductible.

I can't think of any good ideas for structuring so as to maximise tax deductible debt.

Any advice would be greatly appreciated..

Thanks

Freddo

 

Shame that the IP loan didnt have a offset. That was a major error. If it did you could be pulling the offset out and buying your house with cash and the IP would then have a deductible loan in full.

Too late to learn this but nobody can fix what has happened. You have already made the mistake.

The structure of the ownership and borrowing for the new home and its potential as a future IP should be explored. Land tax and servicing etc and bank policy may dictate the name/s for title and leave the door open for the potential other home in 2 years.

 

You haven’t given us much information but you have many options.

For example:

1. Move into the current IP (make it your PPOR) and buy a second IP using 106% debt.

2. Sell the current IP, use the cash to buy a PPOR and buy another IP using 106% debt.

Not advice. Crunch the numbers.

 

Thanks everyone; sorry but how one achieve 106% debt?

Unfortunately the current IP is being rented out....

 

Easy. Set up two loans, A for 80% against IP being purchased and B for 26% against another property.

In your post above, you stated “We are likely to get a new PPOR in the next 2-10 years.”

Do your tenants have a 2 to 10 year lease?

 

I started a thread on here called something like "11 strategies for when you move out of the ppor and want to keep it"