Search results

Paying off loans is generally a good thing. But from a tax saving point of view it may be better to not pay any loan down at all, but utilise the offset account to make the same savings. However if you are tempted to spend money this strategy may not be for you.

If loan B is used for the property purchase then the interest on this loan would be deductible in the future if that property becomes rented out.

My opinion is no. I don't like parking funds in an offset as it weakens the connection between the borrowing and the use. Also easy to contaminate.

Yes I agree with Rolf. $40k is a loan which doesn't relate to the property so not deductible the $123k portion may be deductible once rented, depending... So get some tax advice.

This $40k loan - was it used for this property? reno, repairs etc?

This is an important distinction.

In that case you need to rethink your spits as you have a mixed purpose loan possibly. best to seek specific tax advice

Probably the best way to structure. But have you ever withdrawn from the existing loan ever?