Situation:
I have accumulated almost $50k in one of my used to be PPoR loan now has become my IP loan since I no longer living in the property. I still owe the bank approximately $ 150.000 in order to reduce the monthly debit account in my current investment loan.
My Plan:
I’d like to use the existing $50k which I have transferred into this account during my time living in the PPoR to reduce the monthly interest only debit against my offset account.
Question:
Can I reduce the limit on that account from $150k into just $100k from a taxation point of view ?
The bank said that I can do that to reduce the monthly debit, but shall I leave the debit rate as is now to be able to claim negative gear component or shall I reduce the monthly debit account so that I can move towards neutral gear as possible ? I understand that once the $50k has been used to reduce the loan limit I cannot reclaim that money back, and I can’t increase that anymore.
I have accumulated almost $50k in one of my used to be PPoR loan now has become my IP loan since I no longer living in the property. I still owe the bank approximately $ 150.000 in order to reduce the monthly debit account in my current investment loan.
My Plan:
I’d like to use the existing $50k which I have transferred into this account during my time living in the PPoR to reduce the monthly interest only debit against my offset account.
Question:
Can I reduce the limit on that account from $150k into just $100k from a taxation point of view ?
The bank said that I can do that to reduce the monthly debit, but shall I leave the debit rate as is now to be able to claim negative gear component or shall I reduce the monthly debit account so that I can move towards neutral gear as possible ? I understand that once the $50k has been used to reduce the loan limit I cannot reclaim that money back, and I can’t increase that anymore.