one title 2 loans.

1 would be preferable.with 2 you are borrowing money to put into a savings account, not to invest. If you later take the money out and invest it could be argued that the money is not borrowed and therefore the interest not deductible.Something similar happened in the case of Domjan. Domjan borrowed money and parked it in a savings account before…[Read more]

yes, same interest rate. but you avoid crossing the securities.

Not really – you are just using the PPOR as security. The interest on the LOC will be for the loan for the deposit and costs of the IP.

Hi bb8It may pay to do some creative thinking on how you can get around the rules. I recall that the govt has provided funds so every GP can now employ a nurse. If you set up with your own provider number you may be able to get the funds for the nurse. Maybe you could team up with another dr so there are two of you in the same company – could be a…[Read more]

Do you mean borrow extra and put it in the offset until you use it?I have done this myself, but wouldn't suggest you do it as you lose, or weaken, the link between borrowing money and investing it. If you were to place any other funds in the account your may break the link completely. Safer to use a LOC for the extra equity and the IO loan for the…[Read more]

Generally, set up a LOC on the first and then use a 80% IO loan on the second.

You will need to apply for a variation of security.Each loan will need to be no more than 80% of the value of the property securing it, or LMI would be payable. You may get around the problem with IP3 by setting up an addition loan on IP 1, such as a LOC,  which is secured only by IP 1 and then using this to pay down the excess loan amount above…[Read more]

They are totally different products and should only be used for different purposes.LOC should only be used to access equity. An offset account is used to store funds and save you interest without paying down the loan.Never put a LOC on your home and have you wage go in and out and then take money for investing from it. It will be a tax nightmare…[Read more]

Tax deductibility depends on the purpose the borrowed funds are used for. Taking money from a loan account = borrowings.So if you refinance the interest will only be deductible if the money is used for investments. If you set up a LOC to 80% of the value but deductibility will depend on what the money is used for. If your loan starts off at say…[Read more]

whatsupsupachicken wrote:
Is the loc on the ppor or ip? I'm assuming ppor so you could use it for multiple investments? That sounds really good though!

I think it should be on the PPOR if possible, but probably doesn't matter too much.

say you have loan on your home and a  loan on your IP. Your IP is rented and you have equity in your home and the ability to service and qualify for a LOC.What you could do, after careful structuring advice, is this:1. Put all rent from the IP into your 100% offset account attached to your home loan.2. Pay the interest on the IP loan with money…[Read more]

Nope, once you deposit money into the loan you cannot take it out again without reborrowing.That is why it is a good idea to use IO on the PPOR and pay all extra into the offset. This way you maintain a high loan but minimise the interest. When you move you take your money out and put it into a new offset attached to the new house.The only time…[Read more]

The power of positive thinking/?

I've been walking around pointing my nokia at houses, and nothing happens

You should be right I think as you have fully repaid the funds borrowed for personal use. So when you borrow for investment purposes 100% of the outstanding balance will be for investment.

Check with a solicitor first, otherwise you may be up for stamp duty twice.In NSW it is possible to sign in one name and add a spouse before settlement without paying extra stamp duty – or maybe just $10. s18(3) Duties Act http://www.austlii.edu.au/au/legis/nsw/consol_act/da199793/s18.html

Do a search on Steele's case.You probably couldn't claim the costs associated with the land as you have no intention of making a profit out of it.

Some expenses such as carpet etc would be capital expenses, so you would have to depreciate them – the trust that is. Same with painting too i think.

If the trust is purchasing a rental property then the stamp duty could be deductible against the capital gain when sold. if a person is selling to the trust then the stamp duty may be deductible against any capital gain if it was a rental.Just think of the trust as a separate person – which it is for tax purposes (but not legally).If a person buys…[Read more]