Property Investment - how to structure borrowing
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| 1 | Hoping for some wise advice from others who have been in this position. We have the property we live in plus three rentals. Each property has some borrowing against it. We have enough equity over them all to make our home property effectively debt free and move all borrowing to the rentals (so that it is all tax deductible). Our accountant hasn't been very helpful, but surely we must be able to do this somehow? pinkrose - 2021-01-09 14:10:00 |
| 2 | Matthew Gilligan - Tax Structures 101 - good basic information. artemis - 2021-01-09 14:18:00 |
| 3 | Get a new (helpful) accountant. thumbs647 - 2021-01-09 14:18:00 |
| 4 | Ask your bank to release the mortgage against your owner occupied. beansie3 - 2021-01-09 14:19:00 |
| 5 | thumbs647 wrote:
Seconded. Hopefully your rentals are in one or more LTCs? If not get new valuations, sell them to the LTC with it holding the mortgage and have your personal asset taken off as security. hers.nz - 2021-01-09 15:13:00 |
| 6 | Might pay to discuss this further with your accountant. The concept you need to consider is 'substance over form' You can't just borrow against the rental to pay off personal loans. If you do so, the reason for the increased loans may be personal and therefore non deductible. Ideally you want to borrow from the bank to repay the personal money that you contributed to the rentals. You are essentially borrowing to repay your current accounts. This would make the interest on the loan repayments deductible. Check your set of financial statements and see if you have either a shareholder current account or deed of debt as a liability. If so this is the debt that can be restructured as bank debt tom-tk - 2021-01-09 20:25:00 |
| 7 | Thanks everyone, some good points for me to follow up pinkrose - 2021-01-09 21:43:00 |
| 8 | If you are able to freehold your occupied home, don't pick up the deed. Keep it with the bank for emergenices and get facility to draw down against it. Capricorngirl mlarkin - 2021-01-10 19:56:00 |
