Loan structure

Viewing 8 posts - 1 through 8 (of 8 total)

Lefty
Member
@lefty
Join Date: 2010
Post Count: 40
November 3, 2011 - 4:07 pm
Hi all,
Just a question in regarding tax deductions on investment property loan. Does the ATO allow you to claim deductions on PPOR if you used cash from line credit loan to finance to deposit for the investment loan.
Lefty
Richard Taylor
Participant
@qlds007
Join Date: 2003
Post Count: 12,024
November 3, 2011 - 9:31 pm
Yes the question of deductability is based around the "purpose test" and not the security offered.
As i have mentioned before you could have the loan secured against a pogo stick and use the funds for investment and the interest charged would be deductible.
Admitedly i havent done a pogo stick loan for a while.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Mick C
Participant
@shape
Join Date: 2010
Post Count: 1,099
November 4, 2011 - 1:22 am
Qlds007 wrote:
Admitedly i havent done a pogo stick loan for a while.
Haha…must be one expensive pogo stick
Mick C | Shape Home Loans
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Jamie Moore
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@jamie-m
Join Date: 2010
Post Count: 5,069
November 4, 2011 - 4:35 am
Lefty wrote:
Hi all,
Just a question in regarding tax deductions on investment property loan. Does the ATO allow you to claim deductions on PPOR if you used cash from line credit loan to finance to deposit for the investment loan.
Lefty
As the guys have mentioned above, it's all about purpose.
That said, it's important to keep your loans structured in a manner that easily identifies deductible from non-deductible debt (which it sounds like you have with your LOC).
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
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Ron the Mortgage Broker
Participant
@ron-the-mortgage-broker
Join Date: 2011
Post Count: 13
November 10, 2011 - 12:49 am
Best if you set the investment loan separately.
This can be done even if security is only 1, your PPOR.
it will be much easier to do your tax return too.
the drawback of multiple loan account is there could be multiple annual fee for offset acc.
I know a bank which only charge low annual fee for loan account with offset.
email me to find out more
Richard Taylor
Participant
@qlds007
Join Date: 2003
Post Count: 12,024
November 10, 2011 - 1:20 am
Ron sorry mate why would a client want to offer their PPOR as sole security for the investment loan.

Most of our clients try and go the other way and utilise as little of their PPOR security as they can when acquiring an investment loan. With structured debt recyling over the years the sole security can be the IP without any charge against the PPOR.
Also not sure why you would want multiple offset accounts.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Jamie Moore
Participant
@jamie-m
Join Date: 2010
Post Count: 5,069
November 10, 2011 - 9:56 am
I agree with Richard – Ron's left me a little baffled as well.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
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Ron the Mortgage Broker
Participant
@ron-the-mortgage-broker
Join Date: 2011
Post Count: 13
November 16, 2011 - 3:02 am
Hi Richard,
I am not suggesting to offer their PPOR as sole security for the investment loan.

What I meant was even if the security is your your PPOR (which is Lefty situation), you can still set the investment loan separately
This was my original post "Best if you set the investment loan separately. This can be done even if security is only 1, your PPOR"
Same reasoning with the offsec acc.