Hi all,
If your Investment Property is currently on positive gear, and you withdraw money on the IP to pay your home mortgage, can you claim as tax deductible if your IP is now on negative gear (because of money withdrawn)?
Has anyone done it before?
thanks.
No, you cant do that. If the redraw is used for personal purposes then the interest apportioned to that amount is not tax deductible. Therefore it will change nothing and your IP will still be positive geared.
Donaldhump is correct.
If you redraw from the loan, it is not tax deductible. This is because the ATO looks at the reason for withdrawing money from a loan. By redrawing; you are taking the money to pay off a home mortgage; not for investment purposes.
However, if the money was in an offset; that can be taken and it will be tax deductible.
Are you wanting to pull money out of the mortgage itself or out of an offset account?
Simple answer NO. Complex answer go see an accountant.
You mean, see what you can get away with without the ATO busting you.
No get advice about setting up a bank account in the Kayman islands and then on forward to Ireland then the island of White and then via Russia back to OZ and then you may get away with it.
At least until your name comes up in a database dump leaked by a whistleblower who formerly worked for a Panamanian law firm your accountant used as an intermediary to set up the whole thing.
nope, smarter strategy would have been to have two offset accounts against each properties; You could have then transferred from one to another to achieve the desired…
No.
thank you for your inputs
Not for redraw.
It’s what the money is used for not what is taken from
This is as far as I know, others may be able to support or refute the above.