Tax and PR

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Dec 11th 2012, 1:34 am

#31

Turban Explorer

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Re: Tax and PR

Quote:

Originally Posted by paddyo

oh TE....have hijacked your thread here a bit...apologies!

No problem Paddyo. Tax avoidance is a serious issue!

Last edited by Turban Explorer; Dec 11th 2012 at 1:37 am.

Dec 11th 2012, 6:05 am

#32

Kiwipaul

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Re: Tax and PR

Quote:

Originally Posted by paddyo

If I switch to a Interest Only mortgage then at the end of the term I can sell the house but still owe 100000 of the repayment loan?

Yes you are correct, but you will be paying interest ONLY on the 100,000 and ALL the interest payments will be tax deductible. Also in 10 years time the 100,000 you still owe won't be worth as much as 100,000 in today's money.
Basically it gives you more money NOW.
Also if you pay off the mortgage entirely you will have NO tax deductions for interest payments and so you will pay more tax on the income from the house.

Dec 11th 2012, 11:13 pm

#33

paddyo

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Location: South Coast, NSW

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Re: Tax and PR

cheers for your help Kiwipaul....I'm not the best at this stuff and will take some professional guidance on the best way to manage this for both mortgage and tax purposes. I am happy to pay my due taxes, I just want to make sure I am not paying any unduly.