Turning PPOR into IP, redraw

Hi all,

Awesome forum, I've been trawling for weeks - some really good info here. A quick question if I may:

I'm thinking about subdividing my PPOR in a couple of years and building a couple of townhouses. I will have a bit of capital soon, and I was thinking about parking it in my mortgage (redraw, not offset). For argument's sake, say I have a loan of 300k, and park 100k in the loan which I will redraw in around 3-4 months time. Will that affect the deductability of the interest when I subdivide/develop?
 
Will that affect the deductability of the interest when I subdivide/develop?

You can park it in the loan but the question you should ask is should you?

The answer is NO! use an offset otherwise it will effect the deductibility of interest. using a 100% offset will save you money.

Also look at asset protection strategies in advance of this too.
 
Thanks guys. The trouble is I don't have an offset, only redraw on my current loan (ubank). Is there a way around this if I refinance later?
 
U bank arent going to be too keen to do a subdiv and construction I expect ?

so now might be a good time to look at a lending product "fit for purpose".

is your U Bank loan IO or PI ?

ta
rolf
 
Back
Top