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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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    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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  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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    Adelaide
    Bingo. I'd rather keep it as cash in the offset.
     
    Perthguy likes this.