I'm still contemplating getting a tax ruling on that one Terry.

I ran some numbers and it is a very powerful strategy as you pointed out in a previous post.

Have you ever seen someone called up on Part VIA or similar breach of the Taxation Act for it?

Thanks

Hi Emerald mum,

The only way that you can increase the deductible portion of the loan is if it is used for something that adds capital value to the property. As your friend suggested, renovation is a good example of this.

eg: Your current loan is $100,000 and you complete $20,000 of renovation – The new loan is $120,000 and this will be fully deductible.

Unfortunately any redraws for personal or domestic use will not be tax deductible.

In terms of who to see I would go to the accountant, then fin planner and then banker…

Thanks for the response Terry.

I thought next year's tax rates resulted in taxable income over $80k paying 38c in each $1 – Am I missing something here with the $120k you mention?

I agree Richard.

And in respect to finding a "lender" who doesn't ask those questions, you probably couldn't.

If you looked for specific individuals within those organisations who don't ask the right questions – they are everywhere!

In terms of standard application forms, I don't think ours have it written…? Most probably do though.

And once again, I DO NOT advocate lying or "hiding the truth" from your lender…. ever

Richard,

Just clarifying regarding the up front valuation ordering.

If the deal goes ahead, then the client pays for the valuation right? And if it doesn't then the broker pays for it?

I think Homeside do that now too

Nice brief explanation Terry – I'm saving this link for when the question comes up again.

aaabbbccc,

Have PM'd you. Let me know if you didnt get my details.

Hi Michelle,

With the place in Cowra, did you get $170 p.w week rental BEFORE or AFTER renovation?

Hi CJ,

If you plan to buy another PPOR and turn the existing PPOR into an IP then I would stop making payments to it immediately.

Your best option is to make the Perth property loan interest only and make all your repayments into an offset accounts against that loan.

This has three advantages:

– You are still saving interest on the PPOR until you buy in Melbourne
– You are maximising the amount of cash available for the purchase in Melbourne
– By achieving the above point, you are also maximising the amount of deductible interest on the IP once is swaps over.

With having the loan in your own name, are you referring to the IP or PPOR?

If the property is in joint names you can still have the loan in a single name, but the other personal who's name the property is in will have to give a guarantee.

Hope this helps.

If you have a PPOR home loan then put all the interest into an offset account against that loan, rather than the IP loan.

This way you get both the savings and the deductions…