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Using your Offset account as your primary account

Discussion in 'Property Finance' started by robbie_p, 2nd Feb, 2016.

  1. robbie_p

    robbie_p Well-Known Member

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    Hi guys,

    I recently took some fund outs of an IP and used it to settled some debit (car loan) as well as renovations on my PPOR.

    The funds were placed in a newly created everyday offset account. These funds have now been used up (for renovations), but i was thinking of still using this offset account.

    Financially, does it make sense to have all my income (salary and rental) paid into this account as well as have all my bills come off this account?

    Currently, i do have a "day to day" account where my salary gets paid into and my bills come off.

    Just looking for some general advice please :)

    Cheers,
    Robbie
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    If you are not claiming a deduction and won't be then it doesn't have any tax effect.
     
  3. robbie_p

    robbie_p Well-Known Member

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    I'm not looking at any tax benefits in the change..

    I was that told interest on the loan was calculated daily, so if the repayments of $300 per month, majority of that is interest.

    But if i have my salary and rental income sitting in this offset account, then the payments will remain the same, $300pm, but less of it will be interest.

    I am making sense?
     
  4. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    lets back peddle a bit - where is this offset attached to?

    And did you split the investment loan before using the money?
     
    legallyblonde likes this.
  5. robbie_p

    robbie_p Well-Known Member

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    The loan i guess is attached to my IP, but when the funds were available i was told i can use it on what i wanted, which was mainly renovating my PPOR.

    None of these funds were used on my IP.
     
  6. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Was the loan for these funds implemented as an increase of the existing IP loan, or was it a seprate split account?
     
    legallyblonde likes this.
  7. robbie_p

    robbie_p Well-Known Member

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    Although the loan was secured against my IP, it was separate to IP loan amount.
     
  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    the interest on that loan won't be deductible, but other than that there appear to be no tax issues. If the offset is attached to the PPOR loan then all spare income and cash should be put into this so as to save non deductible interest.
     
  9. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    Shouldn't have any issues. Offset any funds against it, then knock as much as you can into clearing the loan.

    Once at zero balance you can then utilise the loan for investment purposes, and move the offset you use for day to day use against another non deductible loan.