Just a quick question for the tax gurus. I'm in the early stages of developing a property I own - just getting initial sketches done now. I'm wondering what the best way to fund the development is, from a tax and/or cashflow perspective?
I've got cash offsetting my homeloan (PPOR), and I've got a comparable sum available as an equity loan I've drawn down (also sitting in an offset account).
Is there any benefit (either for cash-flow or tax purposes) to paying for the pre-development and/or construction costs using the equity loan as opposed to just using cash? Will the interest for the pre-construction costs be deductable at any stage? Both loans (PPOR & equity) are at the same interest rate, IO.
I've got cash offsetting my homeloan (PPOR), and I've got a comparable sum available as an equity loan I've drawn down (also sitting in an offset account).
Is there any benefit (either for cash-flow or tax purposes) to paying for the pre-development and/or construction costs using the equity loan as opposed to just using cash? Will the interest for the pre-construction costs be deductable at any stage? Both loans (PPOR & equity) are at the same interest rate, IO.