InvestmentPupil replied to the topic Rental income into PPOR, any tax implications? in the forum Help Needed! 14 years, 1 month ago
LOC – Line of Credit.
It’s when you take out an overdraft facility up to an approved amount based on the available Equity in your Property (minus the amount owing).
For example, if you property is worth 300K and you owe 200K, and you take out a LOC. You have up to 80K to use ((300K-200k)*80%). That 80K is just like a credit card but secured…[Read more]
InvestmentPupil replied to the topic Rental income into PPOR, any tax implications? in the forum Help Needed! 14 years, 1 month ago
Ben – I believe so, otherwise they won’t be called a Bank and but instead a Pot-of-Gold-Free-4-All
AM2778 – Not sure why you’re not having your repayments coming direct from your offset instead? (if you’re paying off your LOC loan with your LOC, you’re capitalizing interest are you not?). I think ATO does not like that…(could be wrong)
InvestmentPupil replied to the topic Rental income into PPOR, any tax implications? in the forum Help Needed! 14 years, 1 month ago
btw –
reducing the interest payable = more goes into the Principal = sooner you’ll build more equity = opportunity to leverage and buy more
(assuming you’re on a PI loan)
InvestmentPupil replied to the topic Rental income into PPOR, any tax implications? in the forum Help Needed! 14 years, 1 month ago
Hi Ben,
I believe “Quazi” means an Offset Account where only a portion of the balance is used to reduce the balance of the loan (as opposed to the whole lot – 100% offset).
Cheers
InvestmentPupil replied to the topic Rental income into PPOR, any tax implications? in the forum Help Needed! 14 years, 1 month ago
G’Day V,
350pw in rentals is pretty good for a “small property”
Money put in your Offset Account will be deducted from the balance of your PPOR home loan and reduce interest payable. If it’s 100% offset, then the interest payable will be based on: (Current Loan Balance – Balance in Offset) x Interest Rate. The interest is typically calculated…[Read more]
InvestmentPupil replied to the topic First time poster, long time visitor in the forum Thanks Richard/Ryan…still 14 years, 1 month ago
Thanks Richard/Ryan…still a long way to go.
Good to know its not illegal.
The variable part it 100% offset already so not paying any interest at all. Switching that part to IO will have no affect lol.
Thought about breaking the fixed loan but that will incur high penalty fees so ive decided to wait it out.
Richard – with IO equity loan, that…[Read more]