Day 20: How to Structure Your Investment Loan for Maximum Tax Efficiency
Published: February 3, 2026
Reading Time: 8 minutes
Location Focus: Sydney, NSW
Loan structuring can significantly impact your tax efficiency. By structuring your investment loan strategically, you can maximize tax deductions and optimize your investment returns.
One common strategy is splitting your loan between investment and personal use portions. If you have a property with both investment and personal use components, splitting your loan allows you to claim interest deductions only on the investment portion. This maximizes your tax deductions.
Another strategy is using an offset account strategically. By maintaining an offset account against your investment loan, you can reduce the interest you pay on the investment portion while maintaining flexibility to access funds if needed. This reduces your interest costs without affecting your tax deductions.
A third strategy is timing your loan drawdowns strategically. If you're planning to renovate your investment property, timing your loan drawdown to occur before the renovation can affect when you can claim depreciation on the renovated components.
A fourth strategy is considering whether to use a company or trust to own your investment property. Each structure has different tax implications, and the optimal structure depends on your specific circumstances. A tax professional and broker can help you evaluate which structure is best for your situation.
A fifth strategy is managing your loan repayments strategically. By making extra repayments on your personal mortgage while maintaining your investment loan, you can reduce your overall interest costs while maintaining tax deductions on your investment loan.
These strategies require careful planning and professional advice. A mortgage broker can help you structure your investment loan strategically, and a tax professional can help you understand the tax implications of different structures.
Call to action: Ready to optimize your investment loan structure? Call Frontier Finance at 0413 798 731. Our brokers will help you structure your investment loan for maximum tax efficiency and investment returns.