Hi would like to get some help from all sifu here.

Intend to purchase auction property with Cash and refinance. And if this workable?

Auction Purchase Price: RM1,000,000
Market value: RM1,150,000 to RM1,300,000
Bank Valuation: RM1,500,000

1. Looking to purchase through auction with Cash and complete the transfer process.
2. Applying for RM1.5x90%=RM1.35 loan

Currently almost no debt(only one 70k loan to keep CRIS record rolling), income documentation ok.

If i am able to make it. Planning to purchase 2units the same method. So, eventually, RM1.35+1.35M loan=RM2.7 loan.

I understood the risk of such loan and is manageble. Planning to invest the loan money at bear bottom.

I am asking knowledge of Sifu is this method workable?

yeah it works, done it many times

If Cash buyer better Done Your tax properly. If Not alot of issues later

Yes workable.

Got 2 part to your process.
1. Settling the auction name transfer process within 90/120 days.
2. Refinance up to bank valuation and cash out the money again.

I would say first process is more risky than the second part but since you are doing the first process with full cash, no worry about that anymore.

After getting loan for auction unit, how fast can do refinance as per MV? Depends on 1st loan lock in period?

Lcclcc using full cash. Not taking loan.

But to your question, can refinance immediately after the loan disburse out. I suggest to take islamic loan. Got no lock in period. Even non muslim can take islamic loan. Interest rate is the same actually.

Refinance: if your loan under Bank A but you want to refinance to other bank B C D, etc.

Top up loan: if refinance under the same Bank A. Actually is better this way. Save a bit on the cost. Better to let the bank know your intention. So the banker can assist you in doing this "top up loan" after loan disburse out.

can be done immediately since you didn't take a loan with the bank, there is no lock in period.

Sorry...drift a bit from topic...

current situation

Prop A = S&P me and wife, loan only my name
Prop B = S&P wife, loan also wife
Prop C = S&P me an wife, loan only my name

If we sell Prop B and later buy another property under her name and loan also under her, is it consider 3rd house for my wife? if yes, LTV shall only 70% right?

This post has been edited by potenza10: Dec 24 2018, 10:43 AM

No, she will still loan 90% and it's 1st party loan since she is the only person in SPA and LA

Hi, im planning to refinance a fully paid house to offset the rental income with the installment interest. But i was told by the mortgage agent refinance property are not eligible for it. Is it true?

Not true, need more info though on what's going on

What info you need? I approached tiger bank mortgage consultant for refinance. She asked me reason for refinance. I told her is to offset the rental income since it is fully settled then i need to declare full rental income.

You cannot use refinanced property's bank interest to offset rental income. Speak to a certified tax consultant or accountant

Thank you for the reply, probably need to visit lhdn for further confirmation.

I think you can. I would claim the interest as expense.

Google Public Ruling 2/2011 and read Section 9, and example 16 Madam Leong’s case

If you used loan at the time you buy the property, I would argue with LHDN section 9 PR2/2011 applies to you. Your ability to repay your loan earlier does not forbid you from claiming refinanced interest expense as you can claim it is temporary

Thank you for the reply. What do you mean claim it is temporary? I did google for Madam Leong’s case, my understanding is if the refinance loan higher than the spa the difference will not eligible for interest deduction. In my case i wanted to refinance after settle the loan and for madam leong’s case she refinance during servicing the loan. Is slightly different here.

If you use refinanced loan for other purpose e.g investment, etc, irb is unlikely to allow the loan interest to be deductable for rpgt.

Temporary - meaning when you fully repay the loan early, you say it was temporary. You could have use the extra cash for other purpose at that time. Now that you get new loan, it is to serve the original purpose ie. financing the property. LHDN gets extra tax from you when you incur zero bank interest, so it was beneficial to you and them together

Yes your case is slightly different from Madam Leong's case. So when you talk to the LHDN officer, argue the repayment of loan is just temporary, now you want to put everything back to normal.

Son, interest expense has got nothing to do with RPGT

We sympathy you have lost your son. simply calling other will not bring him back. if there is any more we could make you feel less lonely or better, believe /k here are willing to assist.

This post has been edited by icemanfx: Jan 6 2019, 11:37 PM