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  • Profile photo of Mr ObviousMr Obvious
    Member
    @mr-obvious
    Join Date: 2008
    Post Count: 1
    October 16, 2008 - 11:09 am
    Terryw wrote:
    2. You should never pay anything off of an investment loan, but place all money in a offset account. So you save the same interest, but still have your funds available without adverse tax consequences. Once your IP is paid off you will be paying tax on the rent and will need a high loan, which won't be deductible, for the new owner occupied property. A double whammy of pain.

    Thanks, sounds like excellent advice.

    Could you expand on "still have your funds available without adverse tax consequences" for me?

    By "Once your IP is paid off you will be paying tax on the rent and…" are you suggesting to manage the amount borrowed against the IP (by the amount in the offset account) to incur sufficient interest to cover the amount of rent and hence avoid any additional tax? (I'm somewhat naive)

    Cheers.

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