Hi there, hope someone will help me.
I’m planning on building a granny flat on my newly purchased investment property as a owner builder. Unfortunately, the bank is not going to give loan for owner builder. I’m planning to use cash from offset(PPOR). Is it a good idea to use offset($110,000), or is it better to pay the loan ($110,000) & redraw(PPOR), from a tax prospective.
Yet
Pay down your PPOR loan by $110K from your offset savings and then set up a separate sub loan. (Do not use a redraw facility).
Just bear in mind you will still need consent from your IP lender to construct the granny flat even if they are not funding it.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Don’t directly redraw it, else you’ll have a mixed use loan which is a pain for claiming tax deductions – reduce PPOR loan and create a new split for the same amount. Before doing this make sure you still have sufficient borrowing capacity with the lender that the PPOR is with, else you might pay down your loan and be unable to create the new split.
Some lenders will allow the split to be created without a full application.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
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