All Topics / Help Needed! / Redraw for repairs?

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  • Profile photo of swampy30swampy30
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    @swampy30
    Join Date: 2003
    Post Count: 85
    June 19, 2004 - 8:09 am

    Please help settle a disgreement between an old married couple. We have an I/O loan with a large redraw facility available on our IP; can we use that redraw facility to finance repairs? I say no, other half says yes…who’s right?

    Profile photo of swampy30swampy30
    Member
    @swampy30
    Join Date: 2003
    Post Count: 85
    June 19, 2004 - 8:20 am

    So sorry – I worded the question badly. I meant to ask, if we used the redraw facility to finance repairs, would that redraw still be tax deductible like the rest of the loan currently is?

    Profile photo of swampy30swampy30
    Member
    @swampy30
    Join Date: 2003
    Post Count: 85
    June 19, 2004 - 8:43 am

    Thank you so much for your reply!

    I owe hubby a few cups of coffee now, cos I was wrong! I’m pleased with the answer though! Got to be worth a few coffees.

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    June 21, 2004 - 1:52 am

    I would say yes.

    If you borrow money to fund income producing activity, then the interest should be deductible. So if you borrow money (ie redraw) to fund repairs on an investment property, it should be ok.

    (I’m not an accountant).

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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