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Too much deposit!

Discussion in 'Accounting & Tax' started by joel, 28th Jun, 2016.

  1. joel

    joel Well-Known Member

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    Location:
    Adelaide
    I have a very unexpected first world problem here.

    I put up a large deposit on a property to show I was serious. My existing property was re-valued very very highly and I want to use as much of that as I can, which now means I barely need to front any cash at all.

    Now clearly I'll have a surplus at settlement - does this have any tax implications? How do I get the cash back into my bank account? I don't want to just use a larger deposit

    I would really appreciate some advice. Thanks all.
     
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  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Do you mean you paid more than 10% deposit?

    The agent would probably be holding this in trust for you until settlement. You could instruct them to return to you any excess (probably at settlement).

    E.g.
    $100,000 property
    $20,000 deposit held by agent
    $90,000 loan from ANZ

    Settle with $90,000 loan from ANZ and 10% deposit with you requesting the agent to refund another $10k to you.

    I don't think there would be any tax issues with this - but seek your own tax advice.
     
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  3. joel

    joel Well-Known Member

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    Yes, my deposit is now too high.

    Thanks
     
  4. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Yes you can instruct via your conveyancer how much of the deposit funds held in trust by the REA to be used at settlement and nominate the additional funds to come back to you
     
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  5. albanga

    albanga Well-Known Member

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    I'm confused, the loan comes after the deposit is paid so why not just loan less?
     
  6. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Borrow less = less deductible interest perhaps.
     
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  7. joel

    joel Well-Known Member

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    Bingo. I'd rather keep it as cash in the offset.
     
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