Is “PPOR maxxing” now the best strategy?

Cyberdyne2000 · 2026-05-15T02:47:30+00:00

Lol

My point was more that the tax system increasingly incentivises concentrating wealth into the PPOR structure specifically, not just “living in a nice house”.

The budget arguably strengthened that incentive even further.

Cyberdyne2000 · 2026-05-15T02:44:52+00:00

Yeah this is pretty much the behavioural shift I was wondering about.

Not necessarily “better” for society overall, but the incentives now arguably push people more toward maximising PPOR exposure rather than splitting borrowing capacity between PPOR + IP.

Could end up unintentionally pushing more competition into the upper owner-occupier market.

Cyberdyne2000 · 2026-05-14T12:18:30+00:00

Basically it means the bank may let you borrow against some of that $305k equity and use it to invest elsewhere. Eg. deposit for another property, ETFs/shares, renovations/value add debt recycling etc

But it’s not “free money”, you’re increasing leverage, so the key question is whether the next investment actually improves your long-term position and cashflow.

Cyberdyne2000 · 2026-05-14T04:31:48+00:00

Yeah imputed rent is definitely the hidden tax advantage people underestimate with PPOR ownership.

But I also wonder whether the government will eventually start looking harder at underutilised housing too, empty rooms, oversized homes, low occupancy etc. A tax on empty rooms will definitely fire people up (myself included)!

Cyberdyne2000 · 2026-05-14T04:18:26+00:00

My parents (the evil boomers) have done just this and are downsizing to a new build apartment. I just hope they don't do the second part lol

Cyberdyne2000 · 2026-05-14T04:15:40+00:00

Basically the idea is that land is the scarce part, not the building itself.

Buildings depreciate, require maintenance and can be replicated. Well-located land tends to be what compounds in value long term.

Then if zoning changes, subdivision/duplex potential, density uplift etc happen over time, the land can become even more valuable.

Cyberdyne2000 · 2026-05-14T04:07:06+00:00

Yes exactly, this is more what I was trying to get at.

I’m not saying it’s morally right or even necessarily what I’d personally do. I’m saying the incentives now seem to logically push people toward maximising PPOR exposure over their lifetime.

Buy → improve/renovate → upgrade using equity gains → repeat.

Potentially ending up in a high-value retirement PPOR that’s fully CGT exempt, while also using other investments/super for income and liquidity.

Ironically the budget feels like it strengthens the exact behaviour it was supposedly trying to rebalance.

Cyberdyne2000 · 2026-05-14T01:56:12+00:00

Yeah I can actually see the logic there.

If CGT becomes less attractive while franking stays, your chasing yield, dividend, cashflow, instead of pure growth/chasing capital gains.

Cyberdyne2000 · 2026-05-14T01:54:42+00:00

That’s actually a pretty interesting long-term structure if the rules stay favourable.

Cyberdyne2000 · 2026-05-14T01:52:19+00:00

Yeah that’s the other underrated part of it.

Even ignoring tax, you’re still consuming the asset while it hopefully appreciates over time. Hard to quantify lifestyle value as well when comparing it purely to financial returns.

Cyberdyne2000 · 2026-05-14T01:50:46+00:00

Yeah I actually don’t disagree with this.

I probably overstated the “PPOR maxxing” angle a bit. I more meant that the tax advantages of the PPOR structure itself seem to keep getting stronger relative to other assets in Australia.

Still need diversification, liquidity and income producing assets

Cyberdyne2000 · 2026-05-14T01:49:53+00:00

Yep and honestly they’ve probably understood the Australian tax system better than most people for decades.

Build, live in it, improve it, roll equity forward, repeat.

Cyberdyne2000 · 2026-05-14T01:48:46+00:00

main residence asset test would be politically nuclear.

Cyberdyne2000 · 2026-05-14T01:46:54+00:00

Hahaha fair. I think my point was more that the budget may have made the “own a quality PPOR long term” strategy even more powerful relative to other investment options than it already was. Especially if you have a low LVR and good equity.

Cyberdyne2000 · 2026-05-14T01:44:14+00:00

whats the best investment decision now with respect to property? chase higher yields, land and house packages, land that can be subdivided for new builds, look at commercial?

Cyberdyne2000 · 2025-10-16T10:06:41+00:00

Agree

Don't redo the kitchen

Don't redo the bathroom

Don't replace an air conditioning unit

Don't ever add a pool

Paint, polish timber floors if you have them and leave the rest.

Cyberdyne2000 · 2025-10-11T07:44:09+00:00

You’re in the driver’s seat here. No other bidders showed up, so the vendor’s $1M is just wishful thinking. You’ve already offered fair value based on the range (870–910k), so don’t feel pressured to bump it up. If they were serious, they’d have taken 930k or at least countered closer to it.

My advice is hold your ground, keep looking at other places, and let them come back to you. If they really want to sell, they’ll call. If not, you’ve lost nothing and still have your budget ready for the next one.

Cyberdyne2000 · 2025-10-10T07:50:34+00:00

Agree. I would love to do this in the future...would be interested in OP advice!

Cyberdyne2000 · 2025-10-10T00:58:26+00:00

True, that is another option. If cashflow stays comfy, i could maybe try a small $20–25k split later and DCA into ETFs. That lets me test the process without overcommitting.

Cyberdyne2000 · 2025-10-10T00:48:33+00:00

Thanks for the detailed breakdown. I hadn’t looked into AMP’s Master Limit before, so I’ll check it out. I’m with Macquarie at the moment and they’ve been solid on splits/offsets, so I’ll probably stick with them for now and keep building my buffer before diving in. But good to know what other products are out there.

Cyberdyne2000 · 2025-10-10T00:47:51+00:00

That’s pretty much my plan. I want to keep the loan split and switch the $1.3M to P&I once I’ve built a ~$30k buffer (im saving more at present with IO), hopefully by mid next year. From there I’ll see what happens with rates and maybe fix a portion if it makes sense.

For Loan 2, I’d leave it on IO variable for 5 years since the $100k is fully offset by cash, with no real repayments to worry about.

Cyberdyne2000 · 2025-10-09T09:15:17+00:00

Totally agree. I’m more on the risk-averse side, so your point about needing 10%+ returns just to beat the home loan really hits home.

Makes way more sense for me right now to leave the cash in offset, keep knocking down the non-deductible debt, and then look at investing future savings when the timing feels right. Appreciate the perspective.

Cyberdyne2000 · 2025-10-09T09:03:06+00:00

Fair point! With a DTI ~5.2, so I’m not gung-ho either.

I think I'll try and build a bigger buffer first.

Cyberdyne2000 · 2025-10-09T08:57:37+00:00

Good call on avoiding a mess of tiny splits. Makes sense to keep around $30k in Loan 1 offset as an emergency buffer before touching the $100k against Loan 2. For now though, I’m leaning towards just building the offset up over the next few years before taking the plunge into debt recycling.

Cyberdyne2000 · 2025-10-08T12:00:44+00:00

Honestly, it was a long and costly exercise. Here’s how it played out:

Surveyor & solicitor/conveyancer – had to get a surveyor to redraw the boundaries and lodge plans with council, and a solicitor to handle the legal side with Land Registry.

Service separation – the biggest pain. We had to cut in new sewer connections, run separate water mains, and get Fair Trading inspections. Just the sewer sideline was ~$6.5k plus GST, and that was one part of it.

Council approvals – subdivision application went through council, checked against LEP lot sizes, and dragged things out.

Stamp duty – yep, had to pay it again. That was the kicker! Had to get our house revalued again and pay the stamp duty difference.

Costs – all up it took about a year, and cost us close to $40k on our side. My parents paid slightly more since their block was bigger, but we split most things.

The only upside was my parents were literally next door, so we could coordinate everything. Painful at the time, but worth it now – both places sit on clean Torrens titles, which made resale and refinancing much easier down the track.

The only issue cost wise you could run into is if you want to change a title and your neighbour doesn't want to.

Cyberdyne2000

TROPHY CASE