My uncle has paid off his debt on 3 properties he bought around 25 years ago, including his PPOR, a block of land and an IP.
The properties are worth ~$2.5m. 2 of the 3 properties have mortgages on them, cross-collateralised, with about $20k owing on the IP.
The IP generates around $45k/yr, but this isn't enough for my uncle to retire off, and he's looking to access equity to live off/invest.
He has used an offset account for the last 5 years, but chose to pay down the principal as well, so now potentially he could take back ~30k from the offset (ie. offset is for ~50k of debt, 30k + remaining 20k).
What is the best way for him to access this money? I think it would have been best for him to make the IP offset with 0 repayments, that way any money he had put in the IP, he could take out and the interest on that amount would be tax deductable.
He wants to have an income of 100k/pa, and would also like to be able to purchase an additional 1 or 2 IPs. He's looking to retire in a few years time.
What would be the best way for him to access the equity? It is very straight forward for him to redraw from his IP and invest in another property. That would make the deposit, stamp duty and everything tax deductible for a new purchase I believe?
Is there anyway he could re-arrange his current loan structure so that he could access his money for his own uses and the interest would be tax deductable (ie. as though he had just put money in an offset the whole time?).
Ideally, he would like to be able to take out money from his property (paying interest at 5.2%, but being tax deductible @ 32.5% bracket, so effectively he pays interest of 3.51%). He would then lend the money to his children, who are uni students and pay no income tax, who could invest it or use it for a deposit on a house.
Thanks in advance
The properties are worth ~$2.5m. 2 of the 3 properties have mortgages on them, cross-collateralised, with about $20k owing on the IP.
The IP generates around $45k/yr, but this isn't enough for my uncle to retire off, and he's looking to access equity to live off/invest.
He has used an offset account for the last 5 years, but chose to pay down the principal as well, so now potentially he could take back ~30k from the offset (ie. offset is for ~50k of debt, 30k + remaining 20k).
What is the best way for him to access this money? I think it would have been best for him to make the IP offset with 0 repayments, that way any money he had put in the IP, he could take out and the interest on that amount would be tax deductable.
He wants to have an income of 100k/pa, and would also like to be able to purchase an additional 1 or 2 IPs. He's looking to retire in a few years time.
What would be the best way for him to access the equity? It is very straight forward for him to redraw from his IP and invest in another property. That would make the deposit, stamp duty and everything tax deductible for a new purchase I believe?
Is there anyway he could re-arrange his current loan structure so that he could access his money for his own uses and the interest would be tax deductable (ie. as though he had just put money in an offset the whole time?).
Ideally, he would like to be able to take out money from his property (paying interest at 5.2%, but being tax deductible @ 32.5% bracket, so effectively he pays interest of 3.51%). He would then lend the money to his children, who are uni students and pay no income tax, who could invest it or use it for a deposit on a house.
Thanks in advance