IP LOC offsetting PPOR

[Chromium]

Folks,

Can I do this..?

Situation.

1. IP - Valued @ 545000K with a debt of 186K.
LOC available of 250K.

2. PPOR - Valued @ over 900k with a debt of 230K.

Can I draw down 230K LOC from IP and park it in an offset account aligned with PPOR ?

Thereby I will not be paying virtually any interest on the debt associated with PPOR. Thereby directing all my monthly payments of 4K to pay off underlying 230K debt.

Once underlying debt on PPOR (230K) is paid off in 5 odd years
I can have PPOR debt free. I can then return 230K LOC back.

I know, I will be paying non-deductible interest on LOC drawdown.
( Can I capitalise the interest on this LOC ? )

By doing this, I will be able to pay off PPOR debt faster without increasing
my current outgoings. ( assuming I can capitalise interest )

Is this a workable ..? Allowed by Taxman ?

If this is not workable..then how can I optimally utilise equity of 740K ?

I am considering another one or two IPs but would rather stay on sides till it cools down a bit and be ready for lucrative bargains.

Regards

Chromium

 

[Terry_w]

I think you have confused yourself. If you borrow from a LOC to pay down a PPOR or park in an offset you will simply be transferring the debt of the PPOR to a different loan. I can't see any benefit from a tax POV, but you may do this to release the mortgage on the PPOR if you want.