Loading
This thread is archived and the information may not be up-to-date. You can't reply to this thread.
Simonsc(Initiate)Initiate
7 July 2024

My bank doesnt want to give me IO for my investment loan and insists on P&I.


so lets say, I pay $500 interest and $1500 principal repayment.

could I not simply redraw the principal repayment ($1500) and still claim the interest on it ?


I’ve read the ruling but I am simply emulating an IO loan which my bank doesnt want to give me - PLUS: my deductions are that way actually less bc IO bears usually higher interest than P&I so it would be win-win for both myself snd the ATO…


so before I change my bank and pay higher interest on an IO loan, wouldnt it be much better and simpler I’d claim deduction on the redraw of the “P-share” of the P& I loan?!?


thank you

423 views
2 replies
423 views
2 replies

Most helpful response

Most helpful reply

Deb_ATO(Community Support)Community Support
12 July 2024

Hi @Simonsc


Yes, you could. As long as the redraw amount is used for income producing purposes only.

If you redraw for mixed purposes, you'd need to apportion the amounts.

It’s up to you what you'd think would be best for your circumstances, sometimes shopping around gets you on the right track.

All replies

Most helpful reply

Deb_ATO(Community Support)Community Support
12 July 2024

Hi @Simonsc


Yes, you could. As long as the redraw amount is used for income producing purposes only.

If you redraw for mixed purposes, you'd need to apportion the amounts.

It’s up to you what you'd think would be best for your circumstances, sometimes shopping around gets you on the right track.

Simonsc(Initiate)Initiate
13 July 2024

Hi Deb

thank you for your response.I want to use the redrawn amount to reduce my homeloan - effectively the situation would be the same like IO - I would use the principal repayment amount for my homeloan instead of the investment loan repayment

Featured articles

Tax tips for managing your side hustle

22 Apr 2024 · 6 min read time

Tax on gifts and inheritances

15 Apr 2026 · 5 min read time

How much tax should I pay on a second job? Claiming the tax-free threshold

15 Apr 2026 · 4 min read time

Top liked users

  1. Bruce4Tax

    (Taxicorn)

    3248 likes

  2. Taxduck

    (Taxicorn)

    2049 likes

  3. PayrollDeanne

    (Taxicorn)

    812 likes

  4. YellowPotato

    (Taxicorn)

    519 likes

  5. knaresbro

    (Devotee)

    364 likes

Top contributors

  1. Bruce4Tax

    (Taxicorn)

    10382contributions

  2. Taxduck

    (Taxicorn)

    4737contributions

  3. PayrollDeanne

    (Taxicorn)

    2047contributions

  4. YellowPotato

    (Taxicorn)

    1336contributions

  5. YEP

    (Devotee)

    837contributions

Loading
Redrawing principal repayments on investment loan | ATO Community