I have a question regarding deductability / claim negative gearing.
Scenario as follows:
Bank advises they will not provide 10% deposit for auction.
Purchase an investment property at Auction, – lets say 600k
I pay with my own funds (redrawing funds from my PPOR home loan) the Deposit – 10% 60k
At settlement the bank investment loan commences for 600k – remaining 540k to the vendor.
The other 60k the bank places back into my PPOR.
Would the tax office deem the funds / loan as mixed – and rule that I cannot claim against the 60k portion??
I rang the ATO and they said no over the ph, ?? just hope they dont change their minds…
Regards…..
You're using cash for the deposit so won't be deductible.
Try using a deposit bond for the deposit.
p.s – sounds like these loans could be crossed.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Thanks for the advice,
Goes to show – speaking to the ATO over the ph – they're not always right, would want it in writing
Good news – The bank has come through with a deposit loan – so no mixing – woohoo
darkness72 wrote:Thanks for the advice,Goes to show – speaking to the ATO over the ph – they're not always right, would want it in writing
Good news – The bank has come through with a deposit loan – so no mixing – woohoo
ATO phone people are rarely correct!
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terryw wrote:darkness72 wrote:Thanks for the advice,Goes to show – speaking to the ATO over the ph – they're not always right, would want it in writing
Good news – The bank has come through with a deposit loan – so no mixing – woohoo
ATO phone people are rarely correct!
It's scary isn't it.
You wait up to an hour on hold to be given incorrect information.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
What is more scary is that you can speak to 2 different people at the ATO and get 2 separate answers.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
darkness72 wrote:Purchase an investment property at Auction, – lets say 600k
I pay with my own funds (redrawing funds from my PPOR home loan) the Deposit – 10% 60k
At settlement the bank investment loan commences for 600k – remaining 540k to the vendor.
The other 60k the bank places back into my PPOR.
If you redraw $60k from PPOR loan and use this to pay the deposit then that portion of PPOR loan interest is deductible. It is the order in which it is done that matters. PS This website editor does not work with Internet Explorer which is why I don't bother posting here any more.
2 issues here
1. You cannot reimburse yourself
2. Part of the loan will be not deductible as a result, ending with a mixed purpose loan.
There is a simple solution. Borrow the $60k from someone else, properly document it, and then refinance this loan. Needs to be done properly.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Qlds007 wrote:What is more scary is that you can speak to 2 different people at the ATO and get 2 separate answers.That sounds like the same as talking to the banks
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
No Colin i said 2 separate answers from 2 separate people not 6 separate answers from the same 2 people lol.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
FMS wrote:Qlds007 wrote:What is more scary is that you can speak to 2 different people at the ATO and get 2 separate answers.That sounds like the same as talking to the banks
Ahhh geeze. I had a cracker of a day last week.
Credit told me that a certain scenario was doable – "yeah, no worries. It's a deal – not a problem. Put it up." So I submit the deal – get a call from the assessor two days later – "sorry, we can't approve it – it doesn't meet our policy." So after a day of politely explaining the structure/scenario and the advice already provided by credit – they overturned their decision and granted formal approval…..so all in all, I gained a couple of premature grey hairs for nothing
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Jamie M wrote:FMS wrote:Qlds007 wrote:So after a day of politely explaining the structure/scenario and the advice already provided by credit – they overturned their decision and granted formal approval…..so all in all, I gained a couple of premature grey hairs for nothingIt always pays to be polite and patient with the bank staff even when everything with in you wants to do otherwise!!!
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
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