drawinng funds from equity....best to use offset account???

Discussion in 'Accounting and Tax' started by lowie, 19th Jan, 2010.

  1. lowie

    lowie Member

    19th Jan, 2010
    hi guys,

    im new to the forum. ive got 1 IP in QLD and have now moved down to NSW.

    just wondering, say ive my IP has a loan for $200k, i have equity of $100k, i want to draw out $50k for personal use ie. debt consolidation, holiday, car or whatever but i also want to draw out a little extra to look for another IP in NSW. (i know the figures are not realistic, they are just for example sake). so say $10k for personal and $40k for new IP.

    i am looking at getting an offset account setup, possibly 2 as i will split the 2 amounts into separate accounts. tax wise, am i able to claim the interest accrued on both amounts or only the $40k? is there a timeframe i must use the $40k within in order for that to be still tax deductable.

    or is there any better way of doing it??? i've looked into line of credit as well . i am using suncorp btw.

  2. Propertunity

    Propertunity Real Estate Buyers Agent

    1st Jul, 2008
    NSW Central Coast, Sydney, Newcastle and Lower Hunter
    Only the bit for investing - in your example the $40K

    something "reasonable" at a guess. The ATO like that word. They use it a lot. BUt in practice if you do an equity draw for $40K and don;t use it but park it in an offset account, the nett cost is virtually $zero anyway isn't it?