Using Offset to put down deposit on IP

The 300k was my savings. I took out a separate loan to buy my investment property with Commbank. The house was 500k and used 200k from my offest account (savings) to put down a deposit with Commbank.

Sorry of i have confused the situation but it seem simple in my mind but hard to explain.

Thanks

Hitesh

 

It sounds like all you did was increase the interest on the main residence. And none of that originally borrowed $$$ was used to buy the new property. Hence deduction against IP is $0

I'm with your accountant on this one. They didnt seem to explain it well but reality seems to be that you incorrectly drew funds. If you had asked me prior and checked with a broker likely we both would have suggested :

1. Split facility into $100K and $200K. both with a redraw
2. Repay $200K from offset to clear the $200K loan.
3. redraw $200K and use it to buy IP

Annual IP deduction would have been approx $9kpa.

Can it be fixed ? Not if you have completed settlement.

 

Thanks Rolf,

Lesson learnt.. do my research