offset account with IP?

Hi Guys,

Need your opinion. We will soon be converting our PPOR inot an IP and moving into a rental accomadation. Since we wont have a PPOR to have a offset a/c against, is it advisable to have an offset a/c with investment loan in this case?
TIA

 

Even more important to have an offset account. It keeps non-deductible savings separate from tax deductible debt. You definitely don't want to mix the two.

 

Thanks for your response Peter. I am sorry i am new to all this terminology. So just wanted to clarify, to avoid making a rookie mistake. If i have a offset account with an IP loan, doesnt that mean i am mixing non deductible saving with a deductible loan?

 

It's generally ok to transact from an offset account. You find yourself in trouble if you pay extra into an IP loan and redraw from it for personal use.

Cheers

Jamie

 

For the tax side See
Tax Tip 82: Taking money from an offset account on an IP and Claiming Interest

 

makes se

makes sense now. thanks Jamie

 

thanks Terry, will have a read through this

 

No, that's the whole point of the offset account. It keeps your savings separate from the loan.

 

Thanks Peter, i undertsand it now.