Interest outright investment

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TaxedoMask · Answer

Tl;Dr 'you dun goofed' The purpose of the loan is still for your owner occupier property. The money in the offset is not related to the purpose of the loan. This would be different if you paid the money into the loan - then redrew it to purchase the property (note that redraw and using money from an offset account are different in their tax implications). What you have essentially done is paid for your investment outright - you can't exactly go back and gear it up. In short the interest you are paying on your loan - against your owner occupier property - is non-deductible. You probably should have considered using your owner occupier property as security over the loan or some other method - something to discuss with a financial adviser. Also it would be wise consulting an accountant before making such moves. I guess all you can do is take it as a lesson and move on.

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