Hi guys,
Just wondering if i had a IP that is positively geared can i chose to pay more an bring it just below negative to claim the interest on tax, or is that not aloud because I chose to pay extra?Pay more what?
Paying principal of a loan is not deductible.
Why would you want to make it negative? That would mean you are losing money. You would be spending $1 to save 45cents. Doesn’t make sense.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Paying extra repayments isn’t increasing your costs, you’re just reducing your debt (which in turn reduces your interest making it further cash flow positive!
As Terryw has touched on, it’s a poor line of thought to try to lose money just to get tax deductions as in the end you’re still losing more money than you gain through deductions.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Yeah no worries guys cheers, just trying to get my head around different scenarios, im new to it all so the advice is muchly appreciated.
spend it on your ip, make it higher in rental, at the same time you could claim maintenance cost or depreciation.
How about considering getting a depreciation schedule? Create a non-cash expense.
There’s a weird stigma that if a property isn’t negatively geared it’s a bad investment. It’s a flawed idea – but one that commonly arises.
Nothing wrong with having an investment that makes money.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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