Hi All
I asked a question about financing my home the other day and now I have another one.
My bf has a home loan which is for our PPOR (title under my bf), and I just signed a new contract (soley under my name). We will move into the new home and rent out my bf property.
Unfortunately he was't smart enough to choose an offset account (i.e. loan with no offset account) when he bought his home.
So having read the answers I received in the forum about financing and with some research, we are considering;
(1) set up a loan with offset under my name for the new home purchase
(2) refinance my bf loan to have an offset account. The outstanding princial is 160k. Assuming we can get $330k from the refinancing, we can put $170k in his offset account.
(3) then trf the extra $170 into my offset account (for our PPOR) so that we don't pay any interest on our PPOR and get a full deduction on interest in my bf's IP.
So we went to my bf's accountant to discuss about it, and he said because we are refinancing my bf's to get the tax benefit, ATO may see it as a deliberate attempt to increase tax deduction????
I understand I cannot solely rely on any advice in this forum however the accountant does not seem to understand what offset account is, so would like to ask for how you guys are doing and second opinion.
Thanks in advance.
I asked a question about financing my home the other day and now I have another one.
My bf has a home loan which is for our PPOR (title under my bf), and I just signed a new contract (soley under my name). We will move into the new home and rent out my bf property.
Unfortunately he was't smart enough to choose an offset account (i.e. loan with no offset account) when he bought his home.
So having read the answers I received in the forum about financing and with some research, we are considering;
(1) set up a loan with offset under my name for the new home purchase
(2) refinance my bf loan to have an offset account. The outstanding princial is 160k. Assuming we can get $330k from the refinancing, we can put $170k in his offset account.
(3) then trf the extra $170 into my offset account (for our PPOR) so that we don't pay any interest on our PPOR and get a full deduction on interest in my bf's IP.
So we went to my bf's accountant to discuss about it, and he said because we are refinancing my bf's to get the tax benefit, ATO may see it as a deliberate attempt to increase tax deduction????
I understand I cannot solely rely on any advice in this forum however the accountant does not seem to understand what offset account is, so would like to ask for how you guys are doing and second opinion.
Thanks in advance.