Which ruling is this? Do you have a link to it by any chance? My only what if scenario, is if I decide to move into IP2 at some stage and make it a PPOR. Then technically the interest on interest I created at some point helped fund a PPOR which makes it non deductible.

Backstory is I bought IP1 about 12months prior to refinancing. When I refinanced to get a better rate, the better rate was only for borrowings of at least 200k. So the lender at the time put down 186k to pay off the old loan and 14k for "renovations". I set up an offset to attach to the loan to reduce interest payable. Currently I have no other…[Read more]

As a slight variation to the above, I refinanced and ended up with approx $14k undrawn in the new IO loan. Each month the interest is reducing the $14k available ie I'm not putting money in to paying off the loan, but it's coming out of the amount undrawn. So if I'm capitalising the interest, I take it I can't claim tax deductions on the interest…[Read more]

Terryw wrote:
There will be two tax issues (at least):1) By using redraw you are mixing one loan – business and personal. When you claim interest it must be apportioned, which is relatively straight forward. But if you are making loan repayments you cannot chose to repay the personal debt first. Both must be repaid in proportion to the…[Read more]

morpheusbushy wrote:
that $2000 would have to MAKE at least 7% just to break even. That's the correct assumption isn't it?

Hoping for at least 9%. In research mode at the moment. One line of thinking is that if, say 1-2 years down the track, I need to I can sell the shares/funds and use that money for personal reasons after CGT of course.…[Read more]

Catalyst wrote:
Hi you don't say where you are buying. In NSW you pay the the .25% and exchange contracts. You can put subject to finance etc. You do your searches ate in the cooling off period. Then you pay the 10%. As it stands you have nothing. The vendor can change his mind at anytime because you have not exchanged contracts. Do that ASAP…[Read more]