Redraw from ANZ Loan for IP deposit

I have an ANZ home loan account with redraw facility. I've paid off the loan to the last few dollars so that I can start using the funds exclusively for investments .

I need to redraw for an IP deposit, however from the internet banking,it doesn't permit me to transfer direct to the RE's trust account. I rang ANZ Mortgage today, and after nearly 45 min wait and double-checking a few times, I got told that I could only redraw into a linked (saving/offset) account, then I would have to transfer it from the linked account to the RE's account. Does it make sense to you? I couldn't find clear info in ANZ website either.

I am worried that I might mix the purpose by redrawing into offset first and that it might not be tax-deductible. Is there any workaround?

I've made an appointment at a branch to transfer direct or to write a bank cheque. But any tips are appreciated because I don't want to be stuck without any alternatives. Thanks.

 

No, but that is how ANZ do it.

You are right to be worried. see my tax tip 1

 

Thank you, Terry. I read your Tax Tip 1: Parking borrowed money in an offset account Tax Tip 1: Parking borrowed money in an offset account

How I understand from the Tax Tip 1 and the discussions, to be able to claim tax for the redrawn funds from fully paid off loan
1. the funds need to be used for income-generating investment
2. the funds need to go into an clean (e.g. $0 balance offset or saving or transaction) account before being spent for investment.
3. until the funds in the offset/transaction account have been fully used for investment, you MUST NOT deposit income or use for non-investment purchases.

Am I on the right track? Thanks again.

 

That is something you should get your own tax advice on.

 

Thanks, Terry. I just wanted to make sure that I haven't interpreted incorrectly. I will go through the post a few more times. Cheers.