substitute security partial loan amount

^ thanks for that tip. something for me to think about.
im more interested in the approach to ppor build - advice there is greatly appreciated.

 

Once you sell you will receive cash which can be used to reduce non-deductible debt.

 

If you need extra funds for the PPOR later, one solution would be a separate equity loan against the IP.

 

^ i do not follow that comment at all .... sell?

 

My comment?

Yes you could sell to a related party.

 

got ya. sounds like building ppor is gonna be tough ... hmm...
any other thoughts ?

 

Just sell the one with no loan and buy another - do the sums and work out how long it would take you to save what if costs.

 

You're over complicating it.

Set up a new loan against property 1 and use it for construction of the new PPOR. All the debt will be non-deductible.

If you're happy to sell, do what Terry says.

 

I think he wants to have his cake and deduct it too!