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Thanks for your advice guys, that’s reassuring.
Fortunately my mortgage broker is a personal friend, so he didn’t have any issues with handing the valuation over to me. However I’ve heard most mortgage brokers will also do the same.
My main concern really was that if I were to get a valuation done in the current market, I would hate for it to come back lower than the last one, and eventually have to use the lower amount to calculate CGT if I were to sell.
I’ll be sure to get an appriasal done by the leasing agent. Off topic, but should I except prospective property managers to come out to the property and meet on site, or will I need to meet with each at their office first?
Terryw wrote:Few comments:If you borrow extra and leave it in redraw it will be treated as a new loan once money is withdrawn from the redraw. Deductibility will depend on how the funds are used. If you take money for rates etc then it would generally be deductible. But if you transfer the money from redraw to an offset account to write a cheque, then the interest would not generally be deductible as the funds would no longer be borrowings.
It won't be a good idea to take money from the same loan as your PPOR debt unless it is a different split. This would be mxing loans and you could still claim some of hte interest but it will be messy to work out and other problems if you are paying PI.
From what I've read, it should be ok to empty a transactional account, place funds equal to the outgoing amount in there, then pay the outgoings on the IP. This way I'm not 'mixing urine with water' so to speak.
I will certainly not be redrawing from the PPOR loan whilst the property is still my PPOR. But once it converts to an IP in the next 12 months this will be a different story.
luke86 wrote:One way of doing it is to argue that the reason you are doing it is to be able to hold on to the properties, and not to save tax. It might be prudent to get a private ruling on it to be sure.Cheers,
LukeThat's my thinking. I don't plan to start paying all outgoings from redraw but, should cash flow ever get tight, I imagine the ATO would allow a couple of payments.
So am I able to use the redraw facility to pay for outgoings other than interest on the IP without the ATO kicking up a fuss?
Has anyone else borrowed extra on a refinance for a similar purpose?
Jamie M wrote:Use an "offset" instead of a redraw and you won't have any tax deductibility issues.If I were to put the 'extra' funds from the higher loan amounts into an offset account then I would definitely have tax deductibility issues as I would be mixing with the personal funds already in my offset account.
I should have mentioned that my PPOR is already linked to an offset account and will remain so with the new lender.
Both loans are currently IO and will remain this way with the new lender.
Loans are not cross collateralised.
