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Offset accounts and credit cards

Discussion in 'Property Finance' started by sullivan, 31st Dec, 2016.

  1. sullivan

    sullivan Member

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    I'm awaiting settlement on my first investment property and would appreciate if any finance wizards could point out any holes in my loan setup.

    I have two offset accounts.

    Offset 1 will receive rental income, and I will use for all property expenses.

    Offset 2 will receive my wages and I will use for all personal expenses.

    I will have two credits cards which I will use for all purchases as I wish to utilize the interest free period to maximize the total amount of $ sitting in my offsets.

    One credit card will be for property expenses and will be autopaid by Offset 1 on the same day each month.

    One credit card will be for personal expenses and will be autopaid by Offset 2 on the same day each month.

    Both cards have all fees waived as I will be exceeding the minimum annual spend ($1K on each)

    Will this work?
     
    Last edited: 31st Dec, 2016
  2. Terry_w

    Terry_w Structuring Broker and a Structuring Lawyer Business Member

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    Sounds ok to me.

    I assume you have no non-deductible debt?

    There is no need to have 2 offset accounts, one could do. But no harm if there are no extra costs. (suncorp?)

    No real need to have 2 credit cards either. But as it doesn't cost anything no harm in this either - wonder how long it will be before you use the wrong one!!!
     
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  3. sullivan

    sullivan Member

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    I don't have a PPOR / non deductible debt.

    I believe there are no extra costs for the two offsets (CBA).

    Is there no benefit to having personal expenses and property expenses seperate when claiming deductions come tax time as long as I have all receipts?

    My apologies for asking tax advice in a forum.
     
  4. Terry_w

    Terry_w Structuring Broker and a Structuring Lawyer Business Member

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  5. sullivan

    sullivan Member

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    Yeah I've read tax tip #12 but only now grasp the fact that it's only a mixed purpose loam if paying interest (which I obviously don't plan to do)

    One offset and one credit card is much tidier. My mind is now at ease :)
     
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  6. D.T.

    D.T. Specialist Property Manager Business Member

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    Don't legally need to keep things separate.

    Just need to weigh up the pros and cons :
    - monthly or annual fee on offsets or cards?
    - complexity , might use wrong one
    - awesome for records keeping purposes since fewer transactions on the IP accounts
     
  7. dabbler

    dabbler Well-Known Member

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    I would do it the way you outlined, why ? cause I like to look at one account and know everything listed is related to one specific thing, easier for accountants too.

    The property expenses will all be on one statement or sheet or however you get that info.
     
  8. sullivan

    sullivan Member

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    Hmm... the credit cards have no fees as long as I make >$1000 purchases PA so that's not a worry.

    I guess if I got the cards mixed up it wouldn't be a big deal as my accountant would be cross referencing my deductions from receipts anyway...
     
  9. dabbler

    dabbler Well-Known Member

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    Can I ask who gives cards like that ? or is the offer tied to the loan package ?
     
  10. sullivan

    sullivan Member

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    CBA low fee credit card. 55 day interest free, annual fee waived with $1KPA minimum spend
     
  11. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    No need to specifically separate the accounts to avoid negative consequences- it can just potentially make things a little easier to keep track of/for accounting.

    Keep both offsets attached to non-deductible portion of debt, CBA will allow you to easily label which account is for what through their online banking which is convenient.