Follow along with the video below to see how to install our site as a web app on your home screen.
Note: This feature may not be available in some browsers.
Say, I have council rates of $1500. If I borrow that from a LoC and pay 5% interest ($75 per year), can I then claim the $1500 and $75 on tax?
I suspect not. So, the reason you'd do this is to pay off non-deductible debt first?
Thanks
Srini
What about if I got an investment loan for $310,000 but all the property costs were $300,000.
Can I then just pay all investment bills from the money in that account and continue to deduct the interest?
My PM pays the IP expenses each month from rent collected and deposits the balance in an investment LOC. Each month the IP loan interest is automatically deducted from the same investment LOC & deposited across to the IP loan.
Ok thanks everyone. But to what srini has said (maybe I'm not understanding) but if you borrow the rates its not deductible.
So I should try to borrow anything that my rental income doesn't cover like short IO payments, rates, water rates, landlord insurance ect?.
So what is the best way to do this? LOC and do you have to pay LMI if you take LOC from equity.
Please explain like I'm an 10 year old child lol.
Thanks Terry and Rixter. I'm starting to understand. With the LOC is that going to cost like LMI to take out. And do you take out that LOC against the IP that you want to pay expenses.
My PM pays the IP expenses each month from rent collected and deposits the balance in an investment LOC. Each month the IP loan interest is automatically deducted from the same investment LOC & deposited across to the IP loan.
If you have non deductible debt it would be better for you to pay your own expenses directly by borrowing. Pay off the home loan sooner.
Is this sort of debt recycling? (Except the excess rent is topping up the LOC)