From: Paul Bushy
G day to all,I'm a newbie to this forum. I got into property investing a few years ago after switching out of the stock market.I have a question regarding taxation. My wife and I purchased 3 high growth,positive geared properties in both our names and then purchased property #4,5,6 and 7 for our family trust for asset protection.The first 3 IP's have gained about 80%in value in turn lowering our debt/equity ratio to about 50%.We now wish to get a LOC for the extra equity available to us ,and have the loan repayments taken out it.The rent from these IP's will then be directed to lender #2 (trust Properties)so that they will be paid off early.The first 3 IP's will become negative geared and the trust IP's will become more positive geared .My question is ,Is the interest on the LOC tax deductible as it is being used to pay an expense(interest)
Thanks Paul
G day to all,I'm a newbie to this forum. I got into property investing a few years ago after switching out of the stock market.I have a question regarding taxation. My wife and I purchased 3 high growth,positive geared properties in both our names and then purchased property #4,5,6 and 7 for our family trust for asset protection.The first 3 IP's have gained about 80%in value in turn lowering our debt/equity ratio to about 50%.We now wish to get a LOC for the extra equity available to us ,and have the loan repayments taken out it.The rent from these IP's will then be directed to lender #2 (trust Properties)so that they will be paid off early.The first 3 IP's will become negative geared and the trust IP's will become more positive geared .My question is ,Is the interest on the LOC tax deductible as it is being used to pay an expense(interest)
Thanks Paul
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