Confirm if this is correct split loan structure please?

Discussion in 'Accounting & Tax' started by Panda1, 20th Jan, 2020.

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  1. Panda1

    Panda1 New Member

    Joined:
    15th Jan, 2020
    Posts:
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    Location:
    Sydney
    Hi all

    Just want to check in with the experts before I arrange this loan split.

    We have

    $700K PPOR mortgage
    $356K IP mortgage (settles in Feb)
    $50K PPOR refinance (to pay part of IP deposit, settling this week)

    I want to make sure I isolate the remaining ~60K that we need to use for upfront costs (deposit, stamp duty, legal fees etc) in a separate loan split so as to not confuse things for tax purposes. We'll be using redraw from our PPOR loan account to pay the 60K.

    So should the new structure be:

    $640K PPOR mortgage (split) - non-deductible
    $60K PPOR mortgage (split - to pay part of deposit, stamp duty, legal fees etc) - interest is deductible
    $356K IP mortgage (settles in Feb) - interest is deductible
    $50K PPOR refinance (to pay part of IP deposit) - interest is deductible

    And when we pay the remainder of the 20% deposit and stamp duty at settlement, can i pull the 60k and 50k we need into the one offset account '(against the IP loan), and pay it all from there? Our bank only have a spot for one account to pull the "shortfall" from so i need to throw all the money in one place.
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    see my tax tip 1.
     
  3. Panda1

    Panda1 New Member

    Joined:
    15th Jan, 2020
    Posts:
    4
    Location:
    Sydney
    AH i see thanks. It's a clean offset account with no funds in it yet, so might be OK.

    I'm waiting to see how the bank split my loan too, maybe they can add the $60K split to the $50K refinance and then i can put all the money into that loan account and redraw from there at settlement.