Rent in offset or?

Discussion in 'Accounting & Tax' started by Synergy, 14th Sep, 2019 at 10:57 AM.

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  1. Synergy

    Synergy Well-Known Member

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    Is there tax issues if you get rent paid into offset and then transfer it to bank the investment loan is with? Or is it more simple to just get rent paid straight into loan the bank is with and then transfer the shortfall?
     
  2. Marg4000

    Marg4000 Well-Known Member

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    We always had rent paid into an offset account. Then an automatic transfer each month from the offset for the mortgage payment(s).
     
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  3. Terry_w

    Terry_w Broker, Lawyer, Tax advisor, Debt Recycle advisor Business Member

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    Rent is cash so it should ideally go into the offset account attached to the non-deductible debt and the investment loan paid from this. Doing otherwise will cost you
     
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  4. Synergy

    Synergy Well-Known Member

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    It what way will it cost? Lost interest from extra rent offsetting for the few days its in offset?
     
  5. Terry_w

    Terry_w Broker, Lawyer, Tax advisor, Debt Recycle advisor Business Member

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    Lost interest and More tax basically.
     
  6. Archaon

    Archaon Well-Known Member

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    If rent is paid directly into the loan and you also have a direct debit coming out you will pay your mortgage twice as well.
     
  7. Trainee

    Trainee Well-Known Member

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    Each rental deposit will be a repayment of the loan and each payment will be a new borrowing.
     
  8. Marg4000

    Marg4000 Well-Known Member

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    I always try to simplify my life.

    Cost can be money, or time.

    The monthly loan repayment is a fixed amount, the rental received each month can vary. By paying all rent into the offset, I could schedule the monthly mortgage repayment(s) to occur automatically.

    If you paid the rent directly into the mortgage, EVERY month you would have to calculate how much to pay to make up the required payment, then manually do the transfer. Too much unnecessary work for me!
     
  9. Synergy

    Synergy Well-Known Member

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    Did you get the money pulled from offset by the bank or did you set up a automatic transfer?

    The goal is to try keep it in the offset the longest.
     
  10. Marg4000

    Marg4000 Well-Known Member

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    Not sure what you mean by your reference to “money get pulled from the offset by the bank”???

    We set up the automatic direct payments each month from the offset to the mortgage(s).

    The bank did the transfer, same as with any regular direct debit payment.
     
  11. Trainee

    Trainee Well-Known Member

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    Every lender ive dealt with wants a direct debit.
     
  12. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    They always ask. Its illegal for a lender to insist on a specific payment basis. You can cancel any direct debit. Provided you pay on time by another manner its not a issue. Bpay, EFT etc

    Paying early can assist reduce interest. Banks dont want that do they !!
     
  13. Synergy

    Synergy Well-Known Member

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    so if rent goes in offset mid month and end of month but you pay weekly repayments to bank how would you do it to keep it in offset as long as possible?
     
  14. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Its probably of no difference since the offset accounts ensures interest is minimised ona daily basis.
     
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  15. Trainee

    Trainee Well-Known Member

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    Which bank required weekly payments?
     
    Last edited: 16th Sep, 2019 at 2:17 PM
  16. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Loads of lenders will do this if you are paid weekly. But you can pay it by EFT weekly too. If paid monthly on the due date and the $$$ are kept in the offset I see no difference whether its repaid early or in the offset.

    The issue for people is if they leave the $$$ in savings and pay it monthly then the loan takes longer to repay. The daily benefit of the offset is akin to a real repayment even when it isnt.
     
  17. Trainee

    Trainee Well-Known Member

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    Dont understand why you want to make it so confusing. Rent to the offset. Payments directly debited from the offset. When you have multiple properties, its just not efficient to do it any other way.
     
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