Forums / Getting Technical / Finance / Line of Credit to finance holiday purpose?

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  • Profile photo of zenzen
    Participant
    @zen007
    Join Date: 2016
    Post Count: 46

    Hi PI Team! Hope you all are well.

    Question, can an investor (me) use his line of credit on from his first investment property to finance his holiday in december? Or will this affect the investors tax? Or should the investor simply go for a personal loan for the holiday?

    Thank you in advance for your comments.

    zen :)

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Or save up and pay cash for the holiday!

    If you draw from a line of credit which is also used for investment uses – the purpose of funds will be polluted and cause a nightmare for your accountant to work out from a tax perspective.

    If you have to borrow for the holiday – it’s best this is from a separate line of credit/loan account used solely for this purpose.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,173

    Interest won’t be deductible if you are borrowing for a holiday.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of zenzen
    Participant
    @zen007
    Join Date: 2016
    Post Count: 46

    Thanks heaps Corey and Terry, appreciated.

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