When to redraw when purchasing IP

I am in a situation where I need to redraw against my PPOR mortgage, to invest in property. Pay into the current mortgage from my offset.

I haven't yet decided on which property I will purchase but since my max amount is (almost) set in stone, I almost know the maximum amount that I will redraw. For the purposes of being ready with the deposit and to save myself the two days worth of processing required to open a new account and redraw, I would like to redraw straight away. Pull the redraw into a new offset account offsetting my current mortgage. Whatever expenses I incur towards the property/properties, I will use from this account - to keep it as clean as possible. Am guessing am not the first person to be doing this - anything wrong with this approach ?
Could any of this pose a problem come tax time ?

Cheers,

 

Have a read of tax tip 1

and then the tip on mixed purpose loan. Start the process of splitting the loan now and redraw later.

 

Thanks for replying @Terry_w Just linking the two tips I read :
Tax Tip 1: Parking borrowed money in an offset account
Tax Tip 3: Mixing Loans - Don’t do it

Very detailed - thanks again for your tips.

Unfortunately, I cannot split my loan. As my PPORs value is lesser than what it was when I bought it and my bank (CUA) will do a valuation before it can split my loan (which will result in a high LVR which means, although I don't know what the bank will do as they dont have any products for the new LVR, this isn't an option). The bank gives me 6 free associated offsets of which I am using two currently. As my loan is IO I will avoid a lot of problems you have advised in the mixing loans tip. What I don't understand at the moment, is what happens when I decide to convert PPOR to an IP after the redraw. Have you covered this situation in one of your tips ? : Tax deduction for PPOR-redrawn-converted to IP ( even in cases of a split loan).

Also, I think my question asks something Paul mentions in the third point :

So when are the actual proceeds needed ? Much before you finalise on a property. So redrawing as early as possible is not a bad thing ? As the monies from this account can then be used to pay for a BA. B&P etc.

 

If your main residence becomes a rental only the interest on the part of the loan associated with its purchase or improvements will be deductible.

 

@aussieB with many banks splitting a loan is not a 'credit critical event'. This means it doesn't require valuations, payslips and applications. In many cases it's just a form to fill in and they do it as long as you're not increasing the loan or changing an interest only period.

 

@Peter_Tersteeg Thats what I am told most banks do. But in my case my lender, CUA will do a valuation Sadly, this is what their call center keeps telling me. I have a feeling they are just reading of a script. Unfortunately, none of the MBs I know have them on their panel, so its impossible to get an authoritative answer on it. The MB who got my current mortgage was also told the same thing - revaluation will be needed.