This is about tax incentives - I currently live in a an apartment property that I have paid off to a degree but want to utilise the equity to buy a house. I understand that I can borrow 80% of the current properties value but unsure what sort of tax benefits I am going to be able to claim? Thanks in advance for your help.

Hi Aaron

First you will have to decide which property you will live in and what property you will rent out.

You will be able to claim against the rental income all the outgoings on the property. Outgoings such as council rates, water rates, insurance, interest expense, depreciation, rental agent fees, etc.

If your rental deductions are greater than your rental income (negatively geared property) then you will be able to use that to reduce your taxable income.

Hope this helps.

Aaron. Thanks for your question. You can certainly use the equity in your current Owner Occupied property to buy investment property. The 80% level is not necessarily a limit but could turn out to be good advice.
Just because you choose to do this, it does not suddenly turn your Owner occupied property int a tax deductible situation. The tax benefits are around the 'purpose' that the funds are used for and not what underlies it as security.
Your investment property and all associated transactions would be tax deductible ( regardless of security used).
When you borrow against your own home for the deposit, take the money as an additional loan split, so your Accountant can easily determine the tax deductible and private debts
I have one lender who would set up the loans on your Owner occupied property at Owner occupied interest rates, even though you will use the money as a deposit on an investment property.
Please call me to talk through a detailed structure and obtain some lending quotes.
Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN (275 536)