Newbie - Growing the Line of Credit Balance on IP

[MelbGal]

Hi all,

I am new to this forum and have found it very interesting and informative. I thought I knew enough about investing in property but this forum has been great as I have learnt a few good ideas just from 2 days browsing.

I have a question (and I apologise in advance if this has been repeated elsewhere on the forum), I did read some threads on capitalising interest but got a little lost so will go back and re-read. My question is:

My partner currently has a LOC against his PPOR and this property is about to become an IP. The place is worth about $750K and the loan is about $220K. We dont plan to buy another IP soon given that we have just purchased a new PPOR that we will move into shortly so wont have an opportunity to extract this equity into deductible debt any time soon. So to increase the loan balance on this deductible debt, we think that the easiest way is for us to stop paying any P&I on the LOC with all our income going onto our PPOR. We will pay all outgoings for the IP from the LOC and let this loan amount grow. This sounds all Ok to me, does anyone else see any issues from the Tax Man?

Thank you!

 

[Terryw]

Sounds ok to me too, but make sure you only ever use it for investment purposes - and check with your tax advisor first.