booge wrote:
In terms of tax benefits, if it's a case of more work for him I'm fine with that, so long as I get some financial benefit. Are there any good property accountants in Melbourne or eastern suburbs of Melbourne? I don't feel totally confident in mine. I've been told in here chan and naylor are pricey, just after a fair price, not…[Read more]

booge wrote:

Paullie wrote:
So your accountant believes increasing your deductible debt and decreasing your non-deductible debt will have no tax advantage?If Im reading that correctly, you need a new accountant.

He had said "it would complicate tax more as he would need to start apportioning the interest claim on the rental loan." Even…[Read more]

booge wrote:
Had a phone call with a Mortgage Broker, the advice for me was to fix my IP mortgage with ING for 3 years at 5.99% paying interest only. Cost to switch the loan type is $250, I’m already with ING on a variable P&I.

Currently minimum payment per fortnight $596 P&I @ 6.62% variable
If fixed at 5.99% and interest only it would be…[Read more]

You could look at borrowing some equity and investing into high yielding shares. Mst be careful tho. You could then possibly capitalise the interest on the LOC for hte shares and get some good dividends.give us some rough numbers?

Derek wrote:
Ditto

No, his name was Richard.

I knew some people who did – had to sell their properties in the end.

no, the other one.If you borrow from IP 2 and put it into IP 1 and then live in that then the interest on the extra borrowed from IP2 wouldn't be deductible.

If you borrowed it and place it into another investment loan then it would be just a refinancing of part of the debt. deductbility should be the same but you may still retain access to the funds if the second loan has redraw.But you would be required to aportion the interest between the 2 and it would get complicated if you were to ever live in…[Read more]

It seems you've paid extra into the loan, so that $54k cannot be reborrowed without considering the tax implications. If you reborrowed it for the next IP then the interest would be deductible, but not if it is used for personal expenses.Maybe you could set up a fixed loan based on the amount excluding the $54k and keep that variable and available…[Read more]

What are you trying to achieve?

sorry about my poor grammar – i type fast

hi CatalystYes, renovation and selling would be good. But I took the term flipping to mean just buy and sell straight away – possibly without even settling on the property.

Richard,New residential premises is defined at s40.75 GS Acthttp://www.austlii.edu.au/au/legis/cth/consol_act/antsasta1999402/s40.75.htmlPremises up to 5 years old could still be classed as 'new' under this definition if they have not previously been sold.This is a very complex area.

Yes. The extra tax on the new loan, ie the redrawn amount, will not be deductible because you will be borrowing it and placing it in a savings account.

Solomon10 wrote:
    Thanks for your explanation Jamie, i understand that much,including the article you linked to. But what is the difference from just re-drawing the amount to take it across to your new ppor? Would the ato frown upon deliberately increasing deductible debt and reducing non deductible?

Withdrawing from a loan = new bo…[Read more]

Capital gains haven't happened yet – so hard to evaluation. But no point in investing without them so you need to consider.

Certainly not!Completelyy different products and you can get into a lot of troube by using a LOC.

booge wrote:
As far as IO goes, at what stage do you pay down the principle? Or is it just left IO until you sell it? Always wondered what people did and why in this situation.

Its up to the individual. Some keeping rolling over indefinitely. Others like to pay off a main residence first and then start paying off the investments. Others just…[Read more]

Sorry, and the answer to that question:1. No. A taxpayer's purpose of 'paying their home loan off sooner' does not mean that Part IVA of the Income Tax Assessment Act 1936 (ITAA 1936)1 cannot apply to an 'investment loan interest payment arrangement' of the type described in paragraph 3 of this draft Determination.see…[Read more]

EPI_Den wrote:
My experience is that you need to get a tax ruling to capitalise interest, and your primary reason given needs to be that you're paying off your home loan faster. If you say you want to capitalise interest so that you can reduce your tax debt, it'll be a miracle for the ATO to rule in your favour! I hope this helps. And good…[Read more]