You would have to add up all the expenses and see if these are less than the rent. If rent exceeds expenses then it would be cashflow positive.If you had $100k in the offset you would be saving around $6,500 in interest pa so it probably would be cashflow positive.. But if you removed the money it may turn into negative.

What will your income be like when you are not working?If might be better to open a savings account in your own name and earn some tax free interest and let your husband save more tax on the negative gearing – but this will depend on the savings rate.I seen one on TV tonite which was around 6.01% at call for the first 4 months with Rabo bank.

Which do you think will show greater capital growth?

Summary1. Never deposit funds into a loan2. Use IO loan with 100% offet

My impression is that Cintaku wants to buy a holiday house but still claim all associated costs with it.

You would get getting a 6.5% approx return if you use the offsetv4.5% approx in a savings account.Are both names on title for the IP? Does one spouse have very low income?

Yes, it would be possible, depending on the value and location etc.But still not so easy. If you were working and had good income etc and both properties were taken as security and the LVR was less than 70% and your dad got independant legal advice then a private lender may lend to you. Probably not an institutional lender though.

Hate to inform you that will be virtually impossible.Banks will only lend 95% against a property value for squeaky clean borrowers. Private lenders even less.

Have you cross collateralised the loans?Best way would be to set up a new loan on each property and use that as deposit. What LVR are they at atm?

Why not put it in the offset on IP2?

If the property is available for rent then all costs would generally be deductible

Or look directly at the lawhttp://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.145.html

JohnDo you realise you can change names on title in VIC (between spouses) without stamp duty? (maybe just $50 nominal).For CGT absence from main residence see s118-145 ITAA 1997. You can be absent for up to 6 years as still claim it as your main residence.

Yes, good points.

Thats not a legal question. Foreign investors still are restricted in what they can buy. I don't know if its too easy or not – its not something I have thought about before. There are certainly a hell of a lot of Chinese buying off the plan apartments at the moment. Not sure this is a good investment though so they will probably lose money – which…[Read more]

I say may because not all main residences are exempt from CGT.The law decides whether you can claim interest or not. Section 8-1 ITAA 1997.CGT exemptions for absence from main residence s 118-145 ITAA 1997

If you had the property available for rent but couldn't find a tenant you may be able to claim the full deductions.Not sure what you are getting at in your last paragraph.If you are absent from your main residence you can rent it out and still claim it as your main residence and it could be CGT free for renting it for up to 6 years. If you are not…[Read more]

1. No. Costs can only be deducted to the extent that the relate to generating an income.Some costs could be claimed against capital gains when sold though.2. Only one could be counted as the main residence at any one period.3. Yes would pay tax on the rent.

And ANZ have increased their variable rates!!!!!!!

Bank's don't usually revalue or call in residential property loans.Sounds like you are doing things the risky way. There are ways to do it much more safer for you.