Hi All My partner bought a property in 2017 in her name only with a P&I loan of $340,000 from ANZ and in March 2021 we have rented it out to tenants. Take a step back and in July 2020 the bank ANZ said the account didn't have an offset but the redraw facility is the same thing (not informing us of the tax implications are different and it's clearly not the same thing, bad advice tbh). So, my partner moves $25k of her savings that day into the redraw loan and I had $18k I said could sit in there as well so total $43k. She later moved $8k into her ANZ shares account to buy shares, there is $24k remaining in the redraw facility currently and $12k has been used to pay the mortgage but also other private expenses. This FY she hasn't worked as she is a stay-at-home mum now and has only received government maternity pay. The question is what should we do with the remaining redraw facility amount? I assume the tax-deductible interest on her property is calculated at $297,000 now.
doesnt sound good, but could be much worse Back in the days when "salary credit " loans and LOCs were all the rage, and folks were living out of their loans, they sometimes found zero left to claim. To be fair, banks dont give tax advice..............nor do brokers, and interestingly under new laws introduced Jan1, under client best interest duty we are supposed to do that formally now in regards to loan structures. ta rolf
Refinance and split the loan into the relevant portions. You could use the available funds to invest further perhaps.
Thanks Terry. We’ll consider refinancing the loan and splitting it. I’ll discuss with my partners accountant.
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