I have a personal mortgage as well as a seperate investment mortgage and am working full time. I know you can reduce your tax by filling in a 15/15 form so I dont pay as much each week, thus reducing the lump sum at tax return time.
If I can do this can I reduce my weeking tax to nothing (or a minimal amount) and when tax return time comes I will owe the tax man $1000’s. The idea being that last year I paid $40k in tax, ie $750 a week. I want to be able to put this into my persoanl mortgage thus greatly reducing my interest that I get charged while it is in there.
If I started it at say july 1st then my tax return doesnt have to be done till the end of october then I have had that accumulating weekly money on my mortgage for 16 months.
Firstly I dont know if it is legal or the tax man will let me. Even if the tax man was to charge me interest of say 3% then I am still better of because my bank is charging me 7% interest. Saving me 4%.any ideas on this topic would be great
benHi Ben,
Understand the thinking.
A couple of points that you will need to take onboard.
The ATO is not obliged to approve your application for 15.15 variation to your PAYG tax. They get a little narky if you do complete a 15.15 and then owe them tax at the end of the financial year and will consider not approving any subsequent applications.
This is not an issue if you do not need the reduced taxation to help you hold your properties but if you do you can create a problem down the track.
I prefer to have a little something up my sleeve so that I push the envelope during the financial year and also still get a return for using as a lump sum payment on PPOR mortgage at the end of the year. This, and an offset account structure, is helping us to make significant inroads into our mortgage.
Derek
[email protected]Property Investment Support Available.
thanks derek
It’s not as if I need to do this, It was just an idea that I had, (yeah I have weird idea’s). It was a different way of making the most from my money in my offset account.
Might have to give the ATO a ring.I would expect there would be penalties if your estimate of tax liability turned out to be inaccurate.
From the ATO website:
Change of circumstancesYou must complete a new application and advise us of any change in your circumstances during the year – for example, when you sell a rental property or your taxable income changes to the extent that you will receive a debit assessment of $500 or more.
Negative gearing is the best way to reduce your tax.
It’s better to pay interest, than to pay tax, at least you end up with something.
Borrow and buy, the tax man will help you pay it off.
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