negative gear equity in home loan

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sdlwood
Member
@sdlwood
Join Date: 2004
Post Count: 1
September 8, 2004 - 7:05 am
Hello
I wish to re-draw some of my existing equity in my standard home loan to finance a ‘geared’ investment, say $50,000. Can I do this without re-financing and then claim the (home loan) interest on the $50,000 as a tax deduction? Do the ATO allow this to happen.
Any advice appreciated.
KC
Mortgage Hunter
Participant
@mortgage-hunter
Join Date: 2003
Post Count: 3,781
September 8, 2004 - 7:55 am
Yes that will work fine.
I would suggest getting a split on the loan so the two different amounts are clearly defined. This also means that you pay pay your PPOR off at a different rate than the IP – this will aid in tax effectiveness.
Then see a broker about getting a 80% lend for the second property. You should be able to avoid cross collaterisation!
Warm regards,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985
NODOC Loan – 65% Loan – No questions asked! 6.85% Rate!!
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
September 8, 2004 - 12:31 pm
Doa search on the ATO legal site as there are some tax rulings on there regarding this – especially the one on how to calculate interest if it is just one big loan (=one big headache unless your a professor of mathematics).
Terryw
Discover Home Loans
North Sydney
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Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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