I am not sure whether i post this on the finance or Accounting forum… but here it goes..
Lets assume i have a IP with a $250,000 Interest Only loan against it, and have a 100% offset account with it. if i put $100,000 in my offset – i will be charged interest on $150,000, and i can claim that interest on tax.
Now lets assume i go and withdraw $50,000 from my offset and buy a car (personal use), – my interest repayments will increase and be calculated on $200,000. Will i still be able to claim the FULL Interest repayments on tax?Many thanks in advance!
If you use an offset account then the answer is yet. The money never enters or exits the loan and thus the loan remains uncontaminated.
Do not do this with a redraw facility. I have met brokers and lenders who will tell you that redraw is just like offset – Don't let these clowns near your finance!
I agree with Simon, if you have a loan on an owner occupied then this is the loan you should have the offset on but if you do not then you have it correct
Thanks for the input guys!
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