Re-financing PPOR & Tax

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salocker
Member
@salocker
Join Date: 2005
Post Count: 14
April 3, 2005 - 10:21 pm
I have a loan on my PPOR for 280K and have paid down 20k straight off the mortgage. I want to access the equity within the property to invest in a number of other investment properties in the near future (approx 130k equity)
If I re-finance the loan and set the mortgage of my PPOR back to $300k will all the the interest be tax deductable or just the 280k?
IM looking for info from experienced investors as Im am currently speaking with my accountant and I just want to make sure he is advising me correctly.
Im also open to suggestions on the most effective way to re-finance my PPOR to start investing in IP’s
Thanks
Mortgage Hunter
Participant
@mortgage-hunter
Join Date: 2003
Post Count: 3,781
April 3, 2005 - 10:29 pm
Only the portion of the loan you use for IPs will be deductible.
So if you pay the loan down then redraw some for an IP only the new redrawn portion will be deductible.
Hope this helps.
Simon Macks
Finance Broker
[email protected]
0425 228 985
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Derek
Member
@derek
Join Date: 2004
Post Count: 3,544
April 3, 2005 - 10:41 pm
Hi Salocker,
I would also add ‘splitting off’ the investment loans and making them interest only is to your advantage from both a financial and accounting point of view.
Derek
[email protected]
0409 882 958
Property investment advice and researched property in quality locations available.
salocker
Member
@salocker
Join Date: 2005
Post Count: 14
April 3, 2005 - 10:48 pm
Im sorry I should of stated the PPOR is now an IP and has been for the last 3 years. I have been claiming the Interest already as a tax deeduction.
I would like to know if I increase the loan size from $280k back to the origianl laon amount ($300k) will the $20k be still tax deductable.
The loan is interest only
Mortgage Hunter
Participant
@mortgage-hunter
Join Date: 2003
Post Count: 3,781
April 4, 2005 - 1:26 am
Only if the additional $20K is used for deductible purposes.
If you redraw it for personal use it will not be deductible.
Cheers,
Simon Macks
Finance Broker
[email protected]
0425 228 985
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
JULES1
Participant
@jules1
Join Date: 2003
Post Count: 147
April 7, 2005 - 6:55 am
Won’t it be the interest on the $20K additional loan amount and not $20K that is deductible if used on purchasing an IP???
Jules
JULES1
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