Hi,
We have just had our loans refinanced (IP + PPOR + ML) under a BankSA portfolio loan with separate sub accounts. I am interested in paying down the PPOR debt at an accelerated pace - I plan to pay interest only on the IP portion of the loan, pay nothing on the ML portion and pay all that I can on the PPOR loan to reduce it down. As the loans are under the same bank I won't be capitalizing the interest on the IP sub account - I'd rather play it safe from an ATO part IV perspective.
That's a general outline of our loan structure, but the question I have relates to our rental property expenses. I am planning on paying assorted expenses such as water, rates etc through the money we have available in the IP LOC sub account. Is this a valid way of reducing PPOR debt bearing in mind the loans structure is LOC with the one bank? Under this arrangement our share dividends and money that would normally have gone toward IP rates, water etc would help to pay down PPOR debt. In my mind this would be ok for tax purposes, just would like to get peoples opinions/thoughts on this structure.
Thanks,
We have just had our loans refinanced (IP + PPOR + ML) under a BankSA portfolio loan with separate sub accounts. I am interested in paying down the PPOR debt at an accelerated pace - I plan to pay interest only on the IP portion of the loan, pay nothing on the ML portion and pay all that I can on the PPOR loan to reduce it down. As the loans are under the same bank I won't be capitalizing the interest on the IP sub account - I'd rather play it safe from an ATO part IV perspective.
That's a general outline of our loan structure, but the question I have relates to our rental property expenses. I am planning on paying assorted expenses such as water, rates etc through the money we have available in the IP LOC sub account. Is this a valid way of reducing PPOR debt bearing in mind the loans structure is LOC with the one bank? Under this arrangement our share dividends and money that would normally have gone toward IP rates, water etc would help to pay down PPOR debt. In my mind this would be ok for tax purposes, just would like to get peoples opinions/thoughts on this structure.
Thanks,