I have a quick question for the tax experts out there.
I am currently refinancing my PPOR to get access to the equity to use to invest with. My broker has suggested the following arrangement:
1. Refinance to 90% of valuation figure of $405k.
2. Create a separate interest only loan for the amount of $67.5k which is the equity I will have access to.
3. Fully draw the new loan as an investment loan and place into existing home loan redraw facility.
4. Use the redraw on existing loan to fund IP's
According to him, the benefits of this are the interest on the PPOR loan will be reduced as it will have the extra money paid off the priciple until it is redrawn and the interest can be claimed on the full amount of the second loan as it is an investment account for tax purposes.
Can anyone see any potential problems with this setup?
Cheers,
Mathew.
(I hope I have explained this correctly)
I am currently refinancing my PPOR to get access to the equity to use to invest with. My broker has suggested the following arrangement:
1. Refinance to 90% of valuation figure of $405k.
2. Create a separate interest only loan for the amount of $67.5k which is the equity I will have access to.
3. Fully draw the new loan as an investment loan and place into existing home loan redraw facility.
4. Use the redraw on existing loan to fund IP's
According to him, the benefits of this are the interest on the PPOR loan will be reduced as it will have the extra money paid off the priciple until it is redrawn and the interest can be claimed on the full amount of the second loan as it is an investment account for tax purposes.
Can anyone see any potential problems with this setup?
Cheers,
Mathew.
(I hope I have explained this correctly)