Hi Everyone,
I have a 100% mortgage offset account on my house which I am living in, if my parents were to put say $100000 into our house offset account in order to help me lessen my mortgage payment (which is at 7.32% at the moment), would this cause any tax issues going down the road?
What happens if I complicate things by saying I am in the middle of buying an IP which will rent to my folks at the market rate while they put $100000 into my PPOR for offset purposes. How will this complicate things even further?
Should I pay them the interest rate on the $100000? (They are happy for me not to pay them and still paying me the full market rate then I get my IP) Would this open a whole can of worms in terms of tax issues?
B
Hi HG
No cant see an issue in your parents depositing funds into your 100% offset Account (assuming it is a true offset account rather than quazi offset account).
In saying this of course if they receipt a Pension then they will fall into under the deeming Asset rules and the money will be deemed to have received interest even if it hasnt. (Limit on ho wmuch they can gift you each year).
No dramas in buying an IP at the same time just make sure the loan structure is correct.
Dont cross collateralise the loans buy using your PPOR to support the borrowing for the new IP.
Final point to note is i assume your current PPOR will be your PPOR for some years to come.
If not then might want to thing about having it as an IO loan with 100% offset.Usual caveat danger is in the details and with limited information hate to say you get a limited response lol
CheersYours in Finance
Richard Taylor | Australia's leading private lender
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