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mxk12(Newbie)Newbie
8 Jan 2024

Hi there,


I have a owner-occupied home loan (intend to maintain as PPOR). I have a 100% offset account and an unlimited redraw facility (no fees) with my bank. My bank offers full self-service in the transfer of funds between my Offset and Redraw facility. That is, the process is identical to e.g. the user transferring funds between a Transaction and Savings account (fully self-serviced via the app). There is no application process, limits, or fees to redraw unlike more traditional models I've read about. My bank has indicated that the transfer of funds between Offset and Redraw accounts are simply recognised as internal transfers. I just wanted to check if there are any tax implications of withdrawing funds from a Redraw to Offset account in this scenario?


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2,537 views
2 replies

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AnitaATO(Community Support)Community Support
ATO Certified Response10 Jan 2024

Hey @mxk12,


No, there won't be any tax implications as withdrawals from an offset account are treated as savings.


If you had an investment loan, then things would be different. As your loan is an owner-occupied loan you can offset and redraw as much as you like. FYI, if you do have money sitting in a savings account this can earn interest which can be subject to tax. This depends on the amount of interest you earn.




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Most helpful replyATO Certified Response

AnitaATO(Community Support)Community Support
ATO Certified Response10 Jan 2024

Hey @mxk12,


No, there won't be any tax implications as withdrawals from an offset account are treated as savings.


If you had an investment loan, then things would be different. As your loan is an owner-occupied loan you can offset and redraw as much as you like. FYI, if you do have money sitting in a savings account this can earn interest which can be subject to tax. This depends on the amount of interest you earn.




mxk12(Newbie)Newbie
10 Jan 2024

@AnitaATO thank you so much!! This helps A LOT. Thank you.


EDIT: Going off this - if my PPOR was turned into an investment property in say 10 years - and the majority of funds was living in the Offset account at this time. Would my history of transactions between my Offset and Redraw facility (cumulated over 10 years) affect matters around tax?

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Owner-occupied home loan - Tax implications of transfers between Redraw and Offset accounts? | ATO Community