Converting PPOR to investment property (Australia)

[Mark31]

Yes, there's plenty of advice on the web, but it all seems to assume we hold debt against the existing PPOR. SO frustrating.

We own our current house outright, jointly. It's worth ca $500k. We would borrow $500k to buy the new house.

What's the most tax advantageous way to do this? I believe we could "sell" the current house, placing it in just one name. Would we be up for stamp duty on this? Would this mean the investment loan could only be half the value of the existing property?

Would love to hear from someone who's done this before.

Existing house should rent for $400 to $430 a week.

Oh, and we wouldn't have to move into the new house straight away. It could be an investment property for two or three years before we moved in.

[Minion]

Take out a line of credit against your PPOR. Use LOC to buy investments. The interest payments are now tax deductible, voila.

[FFA]

I've not done this, but I'm quite sure the sale will trigger stamp duty. there might be other costs/complexities too. I wonder if it would stand up to audit scrutiny (i.e couple "sells" into one name), might look like an obvious tax driven strategy in which case could the interest deductions be disallowed (??). Suggest you take proper advice before going ahead!

In hindsight, i believe the best way would've been to payback the mortgage on your PPOR using an offset account (without reducing the loan itself). Then withdraw these offset funds to buy the new house. Sorry for any additional frustration, I guess that's not much good to you now !