Legislation doesn't specify how long see s 118-145 ITAA 1936.

Any of the other major banks, ANZ,  Westpact and NAB have good accounts.

Maybe an example will help.

eg You buy a house for $100,000 borrowing $100,000. You have an interest only loan. Later you move out and start renting it. The interest on the $100,000 is fully deductible as this $100,000 borrowed was used to purchase the house which is now income producing.

But, say you used a $100,000 LOC to buy the house. You then get wages and rents etc put in each month. say this is $10,000 to make it simple. You then take out $9,000 for expenses each month. net result is you are paying down the loan by $1000 each month – ignore interest for a min.

Now because you are repaying $10,000 each month you are reducing the amount of money attributable to the purchase of the house. Each $9,000 is new borrowings which cannot be attributed to the house. Think of them as separate loans for private expenses. The result is after 10 months you would have a $90,000 loan, but none of it was borrowed money attributable to the house so none of the interest is deductible.

Hi Woodie

I don't like using LOCs like you have described. I believe they should only be used for accessing equity for investments. Using a IO or PI loan with a 100% offset will have you the same interest and work out better.

LOCs are particularly dangerous for tax reasons. They are a loan, so evey deposit is a repayment and every withdrawal is new borrowings. You can get into a big mess is you were to use the LOC for daily transactions and then later move out of your house and rent it – You could have a huge loan with none of the being interest deductible.

i have one of those products with westpac, and i beleive there is no minimum balance requirement on the offset. I also use their card, altitude, which includes an AMEX card with double points (but not many accept amex these days). This gives me a lot of points which i mainly use to get gift vouchers which more than covers the annual fee.

You may be able to class damages under that section of the TPA if the goods supplied were of an merchantable quality.

Sale of Good Act is worth a look too
http://www.austlii.edu.au/au/legis/qld/consol_act/soga1896128/

St George confusingly have 2 (or 3??) different offset accounts. There is one where they only take the savings off the interest each month. You might be able to switch over.

You will need to convey the title to her, so will need a solicitor or conveyancer. Stamp duty may be exempt in VIC. You will also need to re-apply and requalify for the loan. Legals $1000 approx plus loan discharge and app fees.

Have you got quatity survey reports done on both investments? This will maximise deductions.

Are both IP loans Interest only? so you can pay down the PPOR faster.

eg. Don't know if this is still current:

  Tax on dividend paid to a non-resident exempt from withholding tax as long as it is fully franked. Make yourself a non-resident and get dividend tax free. May still have to pay tax in your country of residence, but some countries foreign dividend income is tax free. Eg. Hong Kong.