Structure

[Liverpool St]

Hi,

I have a PPOR with a loan of $420K and an offset account against that with $420K in it. All income (wages, rent etc.) goes into the offset. At the end of the money I transfer all extra funds to my crossed IP offset account.

I am looking at investment properties now in the $400K range and will borrow against the PPOR for the loan. To keep everything "pure" for taxation purposes, do I simply transfer the $420K into the PPOR account and then borrow back against it for the IP? I presume that if I take the funds out of the offset and purchase the property it won't be tax deductible?

Thanks for your help/advice

LE

 

[Terry_w]

Hi,

I have a PPOR with a loan of $420K and an offset account against that with $420K in it. All income (wages, rent etc.) goes into the offset. At the end of the money I transfer all extra funds to my crossed IP offset account.

I am looking at investment properties now in the $400K range and will borrow against the PPOR for the loan. To keep everything "pure" for taxation purposes, do I simply transfer the $420K into the PPOR account and then borrow back against it for the IP? I presume that if I take the funds out of the offset and purchase the property it won't be tax deductible?

Thanks for your help/advice

LE

Ideally borrow against the equity in the PPOR under a separate loan.

If no equity then you would have to pay down the PPOR and reborrow. But don't pay it right off, just pay say 25% of the value of the new IP off and borrow that under a new split.

For the new IP borrow 80% secured against this property.

 

[Liverpool St]

Structure.

Terry,

Much appreciated. Thank you.

Le