Presently I am renting and want to buy an investment property. The cost of the property is $550K. I am thinking of giving the 20% deposit from my pocketie around $100K and take the advantage of tax deduction from my salary.
Down the time, Can I take out my depsoit and use that 100K amount on buying my residential property. Is there any problem with the tax department when I will increase the claim on tax deduction from the interest paid on $550K which I used to pay on $(550K-100K).
I know this is not the best way but I am going for this option because of the significant land area in the Investment property.
Regards
If you take out 100k for PPOR it will be for private purpose and you cannot claim the interest charges as a rental income expense.
You may also become un-able to claim for the first home buyers grant by renting out a property first
You need to check this out with the state revenue office you are living in as this varies with each STATE.
You can borrow up to 80% LVR as a line of credit if in the future the property increases if you can afford the servicing.
So say if in 5 years time you have a property worth 650k and the loan was say 380k
LVR = Loan to Value ratio
LVR = 80%
650k * 80% = 520k
So subtract debt of 380k = 140k
so you could in this scenario borrow 140k as deposit for next property if you can service extra debt of 140k
But you can only claim 380k of interest charges
and the 140k is private use.Thanks for the advise.
My simple question is the 100K which I have given as the deposit for the investment property because I donot want to pay for mortgage insurance. So that is the money from my pocket and excludes the loan money from financial institute.
At later stage I want to withdraw my deposit of 100K and take the 100% loan on investment property.
There is a second scenario aswell, after buying the investment property , I move overseas and whatsoever deposit I am having with me I deposit against that mortgage loan to reduce the interest on that property. Once I come back to Australia, am I eligible to take that money back and use for my private purpose.
Regards
ArvindArvind if you place these funds in an 100% offset account then you wont have an issue.
Richard Taylor | Australia's leading private lender
except LMI
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