hi all I was interested in the discussion last night about the use of loc to leverage into investments primarily into real estate. and I did try to ask the question ?? why would you not instead of using a loc use equity. take aside the cross colatt problems from my understanding the use of equity gets rid of the problems of the harts case. because if you have taken 300k out of your ppor (as in the example of 100k,100k,100k)not in a loan but in equity you don't need to pay this down into your ppor as its not a loan the loan component is on the ip you buy. yes the ip in real terms is a 100% loan but if the money (as in the hart case) was then put into the loan on the ip (as the ppor doesn't have the loan) even if this was the harts own money it would be a deductable and if required could be seen as a loan from hart to the ip (there are better ways of doing this but this is an example)and it not avoiding tax at all if anything its simplifying what you are doing and is alot more transperant. as the loan is to the ip identity and is not costing the ppor anything. on top of that by using equity its easier to follow the paper trail as no money goes to the ppor and its all thru the books of the ip. once the value of the ip increases to over the equity lend then the equity lend is cancelled at minimal cost. by using this system you only need a offset account to the ppor for cash unexpected expenses which again can be shown as loans. the cross collat is the largest problem but if you revalue the ip and cancell and then use the equity for another ip you are using the leveraging to the max at no cost. anyone have view.