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

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

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  1. lowie

    lowie Member

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    19th Jan, 2010
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    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.

    thanks
     
  2. Propertunity

    Propertunity Real Estate Buyers Agent

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    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?