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Equity loan contamination

Discussion in 'Accounting & Tax' started by Fenris, 19th Oct, 2015.

  1. Fenris

    Fenris New Member

    Joined:
    19th Oct, 2015
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    3
    Location:
    Sydney
    Hi there. New member here. Been reading a lot on Somersoft and here on PC for a while and have learnt a lot from everyone.

    My question relates to an equity loan funded from my PPOR which will have its own linked offset account. The intention is to use the equity loan to fund a couple of IPs. Currently the equity loan has not been drawn down.

    Without going into too much detail, I am foreseeing a short term cashflow problem for some non-deductible expenses. If I draw down a small portion of the equity loan to cover my non-deductible expenses for say a month and then repay the full amount back into the offset before I use it for investment purposes, does this contaminate the loan when I use the funds in the future to fund the IPs?
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    18th Jun, 2015
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    only if you borrow for investment before paying back the first loan
     
  3. Fenris

    Fenris New Member

    Joined:
    19th Oct, 2015
    Posts:
    3
    Location:
    Sydney
    Thanks Terry.