Use savings or redraw?

[streetie]

HI,

Just wondering which is the better option, I have $3000 bill coming up in a special levy for my IP apartment block .

I have money to pay for this in my savings account which is offset to this IP.

But I am thinking is it better to redraw the money from this loan as I had made additional payments.

That way I can keep my savings for my next IP.

Any pros and cons?

thanks

 

[Peter_Tersteeg]

Use the redraw from your IP for the payment, given the special levy is a tax deductible purpose and it's consistent with the purpose of the loan.

In the future, instead of making extra repayments onto the loan, put your money into an offset account.

 

[Terry_w]

Best to borrow for investment expenses generally.

 

[jonmardell]

HI,

Just wondering which is the better option, I have $3000 bill coming up in a special levy for my IP apartment block .

I have money to pay for this in my savings account which is offset to this IP.

But I am thinking is it better to redraw the money from this loan as I had made additional payments.

That way I can keep my savings for my next IP.

Any pros and cons?

thanks

use the redraw as it will be deductible.

 

[streetie]

thany you all.

that's what i thought, I will use the redraw.

cheers

Jamie.

 

[Terry_w]

thany you all.

that's what i thought, I will use the redraw.

cheers

Jamie.

Just make sure it is not redrawn into a cheque account to write a cheque. It has to be paid directly

 

[streetie]

Just make sure it is not redrawn into a cheque account to write a cheque. It has to be paid directly

So when it is redrawn it can't go into my savings offset account and then forwarded to the strata company account via online banking?

It has to come out of the loan and directly put into the strata company's account, is that what you are saying?

 

[Aaron_C]

So when it is redrawn it can't go into my savings offset account and then forwarded to the strata company account via online banking?

It has to come out of the loan and directly put into the strata company's account, is that what you are saying?

I personally think that is overkill. Practically speaking you can't draw a cheque from a loan account. So you have to transfer it to a cheque account first. The problem arises when you leave it in there for a long time.

 

[Terry_w]

So when it is redrawn it can't go into my savings offset account and then forwarded to the strata company account via online banking?

It has to come out of the loan and directly put into the strata company's account, is that what you are saying?

Yes that is what I am saying. Once it hits the savings account it is no longer borrowed money.

It is overkill, but this is the law, see the Domjan case.

However, it is extremely unlikely that the ATO would pick this up, or even worry about it if it did pop up.

Perhaps your bank could draw a bank cheque from the loan and you post it in.

 

[streetie]

hi again,

so ive contacted my bank and they cant take the redraw and pay the strata company direct with it. They have to put it into my savings account.

So i know you said not to do this legal wise, but would it be a real problem if they transferred it into my savings account today and then ill transfer it to strata today as well, so its actually only going to be in my savings account a few hours max?

maybe this is a bad way of doing, but what other my other options?

thanks

 

[Aaron_C]

So i know you said not to do this legal wise, but would it be a real problem if they transferred it into my savings account today and then ill transfer it to strata today as well, so its actually only going to be in my savings account a few hours max?

maybe this is a bad way of doing, but what other my other options?

thanks

I doubt it would be an issue because there is no practical alternative.

 

[Terry_w]

hi again,

so ive contacted my bank and they cant take the redraw and pay the strata company direct with it. They have to put it into my savings account.

So i know you said not to do this legal wise, but would it be a real problem if they transferred it into my savings account today and then ill transfer it to strata today as well, so its actually only going to be in my savings account a few hours max?

maybe this is a bad way of doing, but what other my other options?

thanks

Strictly speaking the interest on that money will not be deductible.

 

[streetie]

how about I open another account, which I will only use for investment stuff, and get the money transferred to this account.

That would solve the problem wouldn't it?

 

[Terry_w]

how about I open another account, which I will only use for investment stuff, and get the money transferred to this account.

That would solve the problem wouldn't it?

It would help.