I am sure my scenario is a common one, but I'd like some second opinions as I'm not sure what my accountant is telling me, is correct.
I have a PPOR with $150k owing.
I have accessed my equity in this property, so I now have a new Investment (Interest Only) Loan worth $210k.
According to my bank I will get credited the $210k amount, which will go into a clean savings account, no mixed personal funding. Then I need to transfer all but $1000 back into the Investment Loan. I will do this because a) I have not yet found a property to purchase and b) I don't want to pay interest until I actually use the money.
When I find a property I will draw down on this loan the amount needed for a deposit, stamp duty, legal fees etc.
The remainder of the new IP costs will come from a separate non-cross collateralised loan, potentially with another lender.
Does this all seem okay in regards to tax deductibility? Will the portion of the 210k investment loan that has been used for deposit be tax deductible.
Eventually I will also look to use that same investment loan as deposits for further properties in the future. Will these also be tax deductible?
Will any drawn funds I use from this loan for IP purposes such as rates, insurance etc also be tax deductible?
I have a PPOR with $150k owing.
I have accessed my equity in this property, so I now have a new Investment (Interest Only) Loan worth $210k.
According to my bank I will get credited the $210k amount, which will go into a clean savings account, no mixed personal funding. Then I need to transfer all but $1000 back into the Investment Loan. I will do this because a) I have not yet found a property to purchase and b) I don't want to pay interest until I actually use the money.
When I find a property I will draw down on this loan the amount needed for a deposit, stamp duty, legal fees etc.
The remainder of the new IP costs will come from a separate non-cross collateralised loan, potentially with another lender.
Does this all seem okay in regards to tax deductibility? Will the portion of the 210k investment loan that has been used for deposit be tax deductible.
Eventually I will also look to use that same investment loan as deposits for further properties in the future. Will these also be tax deductible?
Will any drawn funds I use from this loan for IP purposes such as rates, insurance etc also be tax deductible?