Refinancing and traferring redraw to offset account

Hi,
We have PPOR loan for 500k without offset account but with free redraw option. We've been making overpayments for approx 2 years, however the goal is to redraw this money (approx 50k) for upgraded PPOR and rent out existing one in future. I read that in current scenario if we rent out the appartment we can only claim tax benefit from 450k, not 500k. Can we redraw 50k, refinance full 500k morgage with a different lender and put 50k to offset account? So potentially in future we could tax benefit from full 500k amount?

 

Welcome. Here you go:
Tax Tip 1: Parking borrowed money in an offset account
and more related info: Terry's Tax Tips

 

Make a new split for the 50k, use that to purchase new PPOR and the remaining 450k should be tax deductible.

 

My understanding is that when you redraw 50k it will be new borrowings. Its tax deductibility is dependent on what you use it for. If you use it to buy a new ppor, it won't be tax deductible.

 

This one is specifically on this question:
Tax Tip 77: Redrawing Extra Repayments to Increase Deductions? Tax Tip 77: Redrawing Extra Repayments to Increase Deductions?

 

We don't have enough information to confirm this. The interest on the $450k might be deductible

 

Thank you everyone for responses!

 

Based on smallest interest rate for our current PPOR

 

We are in a similar situation where we have just refinanced our PPOR and was able to get a 50k IO split loan to add to the deposit of IP. Does it matter where would the payment of interest come from for the interest for that 50k to be tax deductible? Our offset accounts were not properly linked initially when the loan was set up thus we need to pay a few dollars for the interest of that 50k IO split loan. Obviously we don’t want it to be contaminated. Is it ok if the payment for the interest would come from that same 50k offset account or a different offset account?

 

Just make sure you are not borrowing to pay interest without tax advice