Redraw loan help

Discussion in 'Loans & Mortgage Brokers' started by jackm, 27th May, 2018.

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  1. jackm

    jackm New Member

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    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.
     
  2. Terry_w

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

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  3. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    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.
     
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Dunno

    Speak with an accountant and broker yesterday

    Sounds unnecesarily messy
    ta

    rolf
     
  5. Terry_w

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

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    Actually this may be hard to do. You could redraw and then split the loan into the relevant portions.
     
  6. jackm

    jackm New Member

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    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.
     
  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    not do in what way ?

    ta
    rolf
     
  8. jackm

    jackm New Member

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    Ok thanks, what exactly do you mean by 'splitting' the loan?
    Cheers
     
  9. Terry_w

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

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    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.