Hi
I live in my PPOR, and want to turn it into an IP. However before I get to that stage I want to lower my PPOR mortgage interest by parking some funds in the MISA account.When I change it to an IP, I want to remove the funds from the MISA and invest them into my own personal account.
Can anyone advise me on whether I need to move the funds from the MISA before or after I turn the PPOR into an IP, so that I can claim the full interest amount on the mortgage against my tax for the the IP.
Or can I even park a lump sum in the MISA, if I intend to turn the property into an IP, and still claim full interest against my tax in future.
I am worried that if I put money in the MISA and then take it out, and use the property for an IP, that I will not be able to claim the full amount of interest on the mortgage on my annual tax
Hope someone can advise me. (Hope you understand my question)
Jules]JULES1
Email MeHello Jules1
I guess all the financial gurus on the forum are taking the weekend off.
Till they return take a look at the article entitled Trading Place – to sell or not to sell. Nearly at the end it talks about structuring a loan to use first as your PPOR and then as an IP.
http://prosolution.com.au/free_articles/articles.php
B.T.W. Is a MISA account the same as an offset account?
Not sure if this will help. [smiling]
ElkaHi Elka
Yes I hope I am able to get a response from the Legal/Tax/Accounting people to this vexing question, as I don’t yet have my own accountant.Yes the MISA is a mortgage investment saver account. Thanks for your response
cheers
JulesJULES1
Email MeHi Jules,
Please note I have no formal qualifications but…………
Originally posted by JULES1:Hi
I live in my PPOR, and want to turn it into an IP. However before I get to that stage I want to lower my PPOR mortgage interest by parking some funds in the MISA account.When I change it to an IP, I want to remove the funds from the MISA and invest them into my own personal account.
Can anyone advise me on whether I need to move the funds from the MISA before or after I turn the PPOR into an IP, so that I can claim the full interest amount on the mortgage against my tax for the the IP.
It is perfectly acceptable to park your funds in an offset account in the manner you describe Jules. As you indicate this will lower your monthly interest bill on your home loan but will still allow you to use the funds for personal gain later and maintain full deductibility of the existing mortgage when it becomes an IP.
Or can I even park a lump sum in the MISA, if I intend to turn the property into an IP, and still claim full interest against my tax in future.
As above
I am worried that if I put money in the MISA and then take it out, and use the property for an IP, that I will not be able to claim the full amount of interest on the mortgage on my annual tax
Hope someone can advise me. (Hope you understand my question)
Jules]Derek
[email protected]
http://www.mononpoly.tic.com.au
0409 882 958
Skype – derekjones2113I am not qualified to answer either, but that has never stopped me before.
I beleive that since the offset is a completely different account, then it has no bearing on tax deductibility. It is just a savings account. So moving money in and out will save interest, but since the money is not coming from the loan account, it should not affect deductibility of anything.
Why don’t you ring the ATO to ask.
Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe†in subject line.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
You must be logged in to reply to this topic. If you don't have an account, you can register here.
