Hey guys, I bought a house about 6 months ago and have been putting all my savings in the redraw facility. I now want to rent this house out, and pull the money out of the redraw, to use as a deposit for my principle place of residence. I understand that if I do this, I will contaminate the loan, and not be able to claim deductions on the amount I pull out for the deposit. Is there any way around this? I'm ready to buy, as soon as I find out what direction to go with this. Obviously in the future I will be going for a loan with an offset account. cheers for the help.
You should split the loan before redrawing. But the interest can never be deductible. Some options: Strategy: 11 Strategies for when you move out of the PPOR and keep it Strategy: 11 Strategies for when you move out of the PPOR and keep it
Hi @jackm Looks like the two are mixed anyway. As suggested above, you will need to split the loan in two. Unfortunately the split equivalent to the redraw won't be deductible. Also, check with your tax accountant for specific advice.
Actually this may be hard to do. You could redraw and then split the loan into the relevant portions.
Ok cheers guys. Yeah I have spoken to my accountant, and he said there is not much I can really do. Just wanted to see if anyone on here with investment experience had ever been through this and came up with a solution.
separating it into 2 portions. In this case the new split will relate to the amount used for the new property. See my tax tips for further details - how to unmix a mixed loan.