Hi, I Am a new member but been reading around for few months now and learning a lot. I am a house wife and full time student. I have been investing in share market for 3 years but still learning. My goal would be to accumulate enough money so we can live off of income from our investment, both of us are in early 30. I am interested in debt recycling since my partner and I own PPOR and have some equity available in it. At first we thinking paying it off faster but maybe not good idea since we are going to turn it into an ip in few years time. The PPOR under both name but investment under my name then if we borrow money to invest under my name from PPOR loan (debt recycling) would half of it be deductible for my partner income? or should we make joint account to invest so half can be deducted? Sorry if I ask too much in my first post Thank you
If you set things up right the owner of the shares can claim all of the interest even though the loan may be in a different name. Speak to your tax lawyer or tax agent.
Hiya DC Does your loan product support an active/managed debt recycle process ? have you modeled the outcomes of an effective DR strategy and how that would affect your capacity to later upgrade(?) into another PPOR ? ta rolf
Thank you both @Property Twins and @Terry_w for your replay, We are planning to see an accountant beforehand but just want to make sure that this is not going to break any tax law or a silly kind of question to ask.
Hi @Rolf Latham, Not atm, only know this strategy after refinance the loan The outcome I was hoping for would be paying little to none on non-deductible interest, increase our shares holding to produce more income and get some deduction against those income. I was hoping to deduct my partner income but if the investment income is higher that the interest we pay then it would mean nothing (unless I am wrong) Atm we pay our loan same time as saving to buy more shares and sometime pay extra to the loan as well. There would be couple of ways am thinking on upgrading in the future, one of them would be sell it to trust (if we get hit by chunk of $$$) other one would be apply another loan since I would have a job by that time. Thanks
It would mean something even if the income exceeds the interest - he or she would still be able to claim the interest which means tax savings. Had you bought them with cash, then no interest to deduct.
If you are directly investing in shares and claiming the interest for your investment loan, you may get your or your partner's income to zero. In this case, you would be eligible for a franking credit refund if any of your share investments are Australian domiciled and generate income from Australian sources.
