Salary sacrifice into investment loan

[menty]

I am considering a position with a new non for profit employer which allows me to salary sacrifice into a home loan. I am not sure of the maximum amount I can salary sacrifice.

Is it possible to salary sacrifice into an investment loan and still deduct expenses? (and negative gear if I need to?). Would I save on tax?

Will this affect the future sale of my property? It still falls under the 6 year rule for PPOR, so I am not sure if this will make a difference

 

[sk71]

I salary package (max is around $16000) and was paying this directly to my mortgage (property negatively geared) however then discovered From another post on here I could not then claim my repayments on tax due to the fact that I was already receiving a tax break from packaging. I just salary packaged to another expense (credit card, personal loan) so I could still claim. Hope this makes sense.

 

[marg4000]

You can't double dip. If you are salary sacrificing the interest then you can't claim it again against your tax.
As always, check with your accountant.
Marg

 

[menty]

Thanks for the advice. I guess this really only works for a PPOR

 

[Qlds007]

Sure does " I guess this really only works for a PPOR"

Cheers


Richard

 

[Paul@PFI]

Sal Sac of a deductible loan is a zero sum game. There will be no increased tax benefit. Your personal salary will drop $16K and your tax deductions for IP interest also drop $16K. Why bother ?

If I were an employee with a home loan and also a IP I would sal sac the maximum on your (non-deductible) home loan and not change the arrangements on the IP loan. That way you may effectively get $16K tax free. Other alternatives include paying off your credit card etc.

Your FBT package people will have recommended you get tax advice ! This place isnt where you should get it. You should follow this and get it from a tax agent who also has financial planner qualifications to avoid wasting your available FBT benefits.

 

[Paul@PFI]

I salary package (max is around $16000) and was paying this directly to my mortgage (property negatively geared) however then discovered From another post on here I could not then claim my repayments on tax due to the fact that I was already receiving a tax break from packaging. I just salary packaged to another expense (credit card, personal loan) so I could still claim. Hope this makes sense.

This doesnt sound right. An employee cant claim deductions for credit card repayments or personal loan repayments anyway as these are "capital". If the card or personal loan have any deductible interest this can also trigger a reduced deduction....There is a difference between a loan repayment and a deductible interest amount.

In the example above the correct tax basis is DONT have the sal sac on the IP loan. Instead you sal sac to a non-deductible loan as there is no effect on reducing deductions. The taxpayers wont claim any more or less deductions as its non-deductible. Instead their taxable income falls - Thats the tax benefit !

 

[sk71]

I think the difference is that it is not salary sacrifice but salary packaging as I work for a not for profit organisation. The first $617 a fortnight is tax free as long as you can prove you have some kind of ongoing expense ( nap can beep rent, car expenses etc) I actually get mine paid directly into my bank along with my salary as an extra payment. You don't actually have to pay it into the debt you have identified. It is a benefit of working for a charity as our wages are so low.

 

[Rob G.]

Salary packaging is about mixing and matching salary and benefits.

If you work for an employer who has a FBT exemption threshold then sacrificing private expenses up to this amount is effectively getting it tax free.

If the employer is registered for GST, then sacrificing otherwise deductible expenses with a GST component above your employer exemption threshold gives you a benefit of 1/11.

(I fail to see how financial planners can charge for salary packaging advice if not a registered tax agent when the whole arrangement is essentially tax driven)

 

[Ed Barton]

I think the difference is that it is not salary sacrifice but salary packaging as I work for a not for profit organisation. The first $617 a fortnight is tax free as long as you can prove you have some kind of ongoing expense ( nap can beep rent, car expenses etc) I actually get mine paid directly into my bank along with my salary as an extra payment. You don't actually have to pay it into the debt you have identified. It is a benefit of working for a charity as our wages are so low.

I would check that. If it get's paid into your bank account and not to the loan account it is income and not a fringe benefit. If you get audited you're going to be in a whole lot of trouble.

 

[Rob G.]

I would check that. If it get's paid into your bank account and not to the loan account it is income and not a fringe benefit. If you get audited you're going to be in a whole lot of trouble.

Reimbursement ?