Hi,
I have a scenario on a property that I would like feedback on.
Let's say a property was bought in the individuals name for $500k with a $400k loan, and has been lived in as owner occupier since bought.
Now several years later the property is worth $1 mil, and the owner is moving out and making it an investment property. Doesn't want to sell as is too good an investment.
The owner then buys another property for $600k to live in requiring a loan value of $480k. When buying this property, takes out a $80k loan on the new property and increases the loan on the old property by $400k to $800k.
Can the owner then negative gear the interest on the full $800k going forward? or can you only ever use the interest on the original loan value on the property as future tax deductions?
Thanks
Loans on Owner Occupier and Investment Properties
I have a scenario on a property that I would like feedback on.
Let's say a property was bought in the individuals name for $500k with a $400k loan, and has been lived in as owner occupier since bought.
Now several years later the property is worth $1 mil, and the owner is moving out and making it an investment property. Doesn't want to sell as is too good an investment.
The owner then buys another property for $600k to live in requiring a loan value of $480k. When buying this property, takes out a $80k loan on the new property and increases the loan on the old property by $400k to $800k.
Can the owner then negative gear the interest on the full $800k going forward? or can you only ever use the interest on the original loan value on the property as future tax deductions?
Thanks
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