Structuring second house?
Question from Carl updated on 29th January 2014:
My wife and I recently bought a second house that we now live in. The first house is rented out. The registered value of each house is around $450,000. We have a mortgage left to pay of $594,000 across both. Should we change our loan agreement so that most of our mortgage is weighted onto the rented house so as not to incur too much tax on that? Our combined income equals about $75,000.
Our expert Kris Pedersen responded:
You definitely need to take personal tax advice as there may be benefits in selling the property across to a different structure which if completed with the correct intentions could also have additional tax benefits. Ideally you do want as much debt on the rental property and as little on the personal residence as possible. Look to use two different banks so you are not cross securing the properties together.
Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.krispedersen.co.nz