Refinancing

From: Adam Randall


hello
Last night I tried very hard getting my head around these new tax changes regarding depreciation (low value pool, loss of accelerated depreciation for investors etc). Anyway I gave up and know less now than when I started. However I am in the process of refinancing my loan which is at 7.75% fixed for 3 years, so I will incur a $10000 break fee from my existing bank, however with the new structure I will have gained that back in under 6 months so its worth it in my situation (4.99% honeymoon VS 7.75%).
Anyway cut a long story short the $10,000 is fully tax deductible in the financial year it is incurred. I did not know this, and thought I'd better mention it incase anyone else is in my situation. Of course I may well have misread it so check either the rental PDF or Depreciation PDF it mentions it in one of those documents (downloadable from the ATO web site). I am very happy as usually only bad news comes from the ATO.
Regards Adam
 
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Reply: 1
From: Jeanette .


Where did you hear about the new depreciation rules? I didn't hear it mentioned on the Budget. I have just finished refinancing my properties and it took 4 months from 'go to wo'. Extremely trying. I hope you don't have as much trouble as I did. Regards.
 
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Reply: 2
From: Owen .


Thanks for the tip Adam. I've just broken one of my fixed I/O loans to go from 7.7% to 6.29% and it cost me $4900. I'll make that bake in less than a year and then be ahead but claiming it all in the one year will come in handy.
 
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Reply: 2.1
From: Diane -


We have just finished breaking out 4 of our loans at 7% and have fixed in at 6.29% for 5 years. The whole exercise will cost us $12,000 (fully tax deductible) and put $20,000 extra dollars in our pocket per year.
I love that!!!!
 
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Reply: 2.1.1
From: Fred Flintstone


Thanks for the tip re-refinancing and Tax write off of the costs, didnt realise it was fully deductible.
 
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Reply: 2.1.2
From: Marina. L


HI Diane,

Its great that you were able to fix your loans at 6.29% for 5 years.

Could you tell me which bank is offering this as when I looked up the rates table this rate was not listed under 5 years it was listed under 3 years only.

Thanks.

MARINA
 
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Reply: 2.1.2.1
From: Rolf Latham


Hiya Marina

Sorry to but in, Stg George had a 6.29 rate for about 3 days a little while back. It was rushed and obviously was killed very quickly.

Look at whats happening to longer term fixed rates right now !

Rolf
 
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Reply: 2.1.2.1.1
From: Cathy Baxter


Hi

This is great info. Just refinanced our commercial property with break costs of about $14000. Reduces our profit by heaps.

Thanks Adam

Cathy
 
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