Transfer PPOR to spouse and turn into IP

Hi,

I have a PPOR worth approx 500k with 250k owing on the loan and owned as joint tenant with my wife. I want to use the stamp duty free transfer of PPors in Victoria between spouses to transfer the property to my own name 100%. This provison from the Victorian SRO allows a spouse to transfer a PPOR into the other spouses name without stamp duty if there is no consideration paid. I will then convert it into an IP.

The question is, when it has become an IP 100% in my own name, how much of the original 250k loan is deductible?

 

I have written about this several times. See my tax tips.

BTW the exemption has changed

 

At best. Maybe 50%. Increasing borrowed funds beyond this may be now difficult while also accessing the duty exemption in its modified form.

 

If no consideration is paid then max $125k could be deductible as this is basically a gift of 50% of the property.

But the stamp duty laws don't allow for a transfer without duty unless going to joint ownership 50/50

 

And the new laws dont exempt transfers with consideration !! Meaning that a new loan to the new owner for the other 50% cant be used to settle the property unless consideration is given. Hence dutiable.