Hello
I'm due to exchange contracts on an IP this week and need to provide the usual 10% deposit, which I have in my savings account.
However, as the property is for investment I want to maximise tax effectiveness. I therefore intend to borrow the 10% but I won't have the borrowed funds ready in time for the exchange of contracts. I will have to use my savings for the deposit.
So my question is this: if I pay for my 10% deposit from my savings, and then get the borrowed funds later (in a week or two), will the ATO question the deductability of the borrowed funds? Will they see the correlation between what I have borrowed and what I have spent on the deposit?
And on this question, at what point is the deposit taken from your account?
Honestly I have been through this process many times but there are always details I forget!
Would appreciate your advice! Thanks team!
I'm due to exchange contracts on an IP this week and need to provide the usual 10% deposit, which I have in my savings account.
However, as the property is for investment I want to maximise tax effectiveness. I therefore intend to borrow the 10% but I won't have the borrowed funds ready in time for the exchange of contracts. I will have to use my savings for the deposit.
So my question is this: if I pay for my 10% deposit from my savings, and then get the borrowed funds later (in a week or two), will the ATO question the deductability of the borrowed funds? Will they see the correlation between what I have borrowed and what I have spent on the deposit?
And on this question, at what point is the deposit taken from your account?
Honestly I have been through this process many times but there are always details I forget!
Would appreciate your advice! Thanks team!