Hi all,
Im new to the property investment game and i have a question this may of already been covered a thousand times before and im sorry if it has.
My question is:
Im changing from a redraw account to an Interest only offset account and i have roughly 8k sitting in the redraw account. Is it better for me to have that money in the new Interest only offest account or to leave it on the principle so the ammount owing when the loan is transfered to interest only is less?Thanks in advance.
You cannot just reborrow the money from the redraw and have the interest deductible. If it is an investment then redrawing the money will complicate things – the interest on the new borrowings of $9,000 will only be deductible if the $9,000 was used for investment purposes.
If it is an owner occupied house it won't really matter and you may as well withdraw the money and put it in the offset.
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
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