Question about structuring finance - Loan account for all property costs / Negative Gearing

Discussion in 'Accounting & Tax' started by Metis, 21st Jun, 2022.

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  1. Metis

    Metis Member

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    Is it possible to set up a loan that is then used to pay all fees relating to your investment properties, e.g council fees, strata, land tax etc and have that loan be negatively geared?

    The goal would be keep my own cash to pay down my PPOR as fast as possible while maximising my tax deductions.

    Unsure if thats doable with the ATO, so thought I'd ask.
     
    Metis, 21st Jun, 2022
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  2. Terry_w

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

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    Terry_w, 21st Jun, 2022
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  3. Metis

    Metis Member

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    Could you pay interest payments out of the same account?
     
    Metis, 21st Jun, 2022
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  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Loan payments of any type (P&I, IO or any other basis) should not be paid from borrowings without personal tax advice. The commissioner frowns on capitalising loans as a potential concern.
     
    Paul@PAS, 21st Jun, 2022
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  5. Metis

    Metis Member

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    Thank you, very helpful advice
     
    Metis, 21st Jun, 2022
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  6. Terry_w

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

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    Terry_w, 21st Jun, 2022
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