Refinancing Invst Prop

Viewing 7 posts - 1 through 7 (of 7 total)

malik_nikunj
Member
@malik_nikunj
Join Date: 2004
Post Count: 14
January 18, 2005 - 6:17 am
Hi,
Say someone has bought a investment property for 500K, out of which 450K is financed by bank and 50K is his own money.
Now upon refinancing for say 550K, can he use 50K on personal expenses ?
Thanks,
Nick.
PropertyGuru
Participant
@propertyguru
Join Date: 2003
Post Count: 1,502
January 18, 2005 - 6:32 am
Hi Nick,
When you refinance you can use money on anything. Lets say your property value was $500k and now it’s $550k you can refinance to $495k and use this $45k extra for anything.
Cheers
PropertyGuRu [sultan]
Mortgage Consultant
[email protected]
MSN ID: amitash, Yahoo Id: bornguru
NZ loan pre approval from OZ in 48 hours,Low Doc from 6.85%,Investment loan 95%+
Mortgage Hunter
Participant
@mortgage-hunter
Join Date: 2003
Post Count: 3,781
January 18, 2005 - 6:43 am
Except of course that if you use the extra money for non income producing purposes yo will not be able to claim the interest on this component on your tax.
I would recommend having a split on the loan to show the different loan amounts – certainly your accountant will thank you for it.
Cheers,
Simon Macks
Interest Free Home Loan Agent
[email protected]
0425 228 985
Please email me rather than using the PM service here.
Fully Accredited With Derivex LTD and IFHL PTY LTD
***Ask about our Interest Free Home Loan***
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
malik_nikunj
Member
@malik_nikunj
Join Date: 2004
Post Count: 14
January 18, 2005 - 7:07 am
Hi,
If i refinance and take 45K away as Amit mentioned, then i should be able to claim the interest on full $495K as the 45K i have taken away is mine not financed by the bank.
isn’t this right ?
Thanks,
Nick.
alfamick
Participant
@alfamick
Join Date: 2004
Post Count: 41
January 18, 2005 - 7:34 am
Nick,
I reckon you’ll find you can only claim tax against the original 450k you borrowed. Even if you refinance for more, you can’t claim it as an expense (unless the additional borrowings are for some other investment, then they’re claimable against that).
Cheers,
Mick
Mortgage Hunter
Participant
@mortgage-hunter
Join Date: 2003
Post Count: 3,781
January 18, 2005 - 7:39 am
Each lot of borrowing is determined as a new loan.
Even a redraw is treated this way.
The purpose of the loan/redraw determines the deductibility.
I suggest you sek professional advice.
Simon Macks
Interest Free Home Loan Agent
[email protected]
0425 228 985
Please email me rather than using the PM service here.
Fully Accredited With Derivex LTD and IFHL PTY LTD
***Ask about our Interest Free Home Loan***
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Mobile Mortgage
Member
@mobile-mortgage
Join Date: 2003
Post Count: 913
January 18, 2005 - 8:36 am
Hi Nick,
Unfortunately the answer is no,
If the $45.000 is for personal use you can only claim the interest on the original investment loan of $450.000
If the $45.000 is for investment purpose then you can claim the interest component on the full loan amount of $495.000
Regards
Steven
Mortgage Broker
Mobile Mortgage Market
[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
Ph:1800 820 500
VICTORIA
PLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.