Is the interest claimable in this situation?

[zayne]

Hi all,

Im currently waiting on a refinance on my property to draw down the equity which I was hoping to use for a deposit on another IP. The additional funds from the refinance may not be available in time for the deposit so I was considering using some of my offset account and borrowing some money from someone else for a week or so until the refinance gets processed. Once the additional funds are available, I could give back the money to the person who I borrowed from and replace the money taken from my offset account. Would the interest from the refinance still be tax deductible and considered as used for investment purposes?

Thanks in advance.

 

[josko]

Yes, as it is for investment purposes.

 

[alexlee]

The amount you use from your offset account might be a bit iffy. Can any tax experts comment?
Alex

 

[zayne]

Thanks guys. Can anyone confirm if the funds I borrow from my offset account and then replace when the refinance comes through is claimable?

 

[The Y-man]

Are you drawing down from an IP or a PPOR?

Cheers,

The Y-man

 

[zayne]

I would be extending a current IP loan to fund a new IP. The additional funds will be replacing the funds in an offset account which is currently offsetting a IP.

 

[The Y-man]

I would be extending a current IP loan to fund a new IP. The additional funds will be replacing the funds in an offset account which is currently offsetting a IP.

There shouldn't be a problem in that case.

Cheers,

The Y-man