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Howmuch(Newbie)Newbie
8 Aug 2024

I've got several Investment Properties and utilize offsets where I can so the money isn't "tainted" if I want to use it elsewhere. Because of these offsets I now have a bit of money in the redraw of some of these loans. As these loans are at differant rates I'd like to move all the available redraw into the loan with the highest interest rate (home move from redraw to redraw). Are there any tax issues with this? (To be very clear this is only moving money from one loan with redraw to another, I only mentioned the offsets so people don't tell me I should be putting the money in offset instead)

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440 views
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Most helpful reply

Matt_ATO(Community Support)Community Support
12 Aug 2024

Howdy @Howmuch,


 The key factor is the purpose for which the funds are used.


If the funds are redrawn and used for investment purposes,

  • the interest on the loan remains tax-deductible.

However, if the funds are used for personal purposes,

  • the interest on that portion of the loan is not tax-deductible.

Redrawing funds from an investment loan and using them to pay down another investment loan. Should generally maintain the tax-deductibility of the interest. As long as the funds continue to be used for investment purposes.


It’s crucial to keep detailed records of the transactions. Including the amounts redrawn and the purpose of the funds. This will help substantiate the tax-deductibility of the interest if questioned by us.

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Most helpful reply

Matt_ATO(Community Support)Community Support
12 Aug 2024

Howdy @Howmuch,


 The key factor is the purpose for which the funds are used.


If the funds are redrawn and used for investment purposes,

  • the interest on the loan remains tax-deductible.

However, if the funds are used for personal purposes,

  • the interest on that portion of the loan is not tax-deductible.

Redrawing funds from an investment loan and using them to pay down another investment loan. Should generally maintain the tax-deductibility of the interest. As long as the funds continue to be used for investment purposes.


It’s crucial to keep detailed records of the transactions. Including the amounts redrawn and the purpose of the funds. This will help substantiate the tax-deductibility of the interest if questioned by us.

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