Turn Your MORTGAGE Into a TAX DEDUCTION | Debt Recycling Australia

Debt recycling could save you $100,000 in tax. It's one of Australia's best tax strategies if you have a mortgage on your main residence and you invest into income-producing assets. It works by converting the non-deductible debt on your home into tax-deductible debt. In this video, I give a step-by-step guide on how to debt recycle.
Get the debt recycling calculator here - www.edvest.com.au/.
Timestamps:
0:00 Intro
0:44 Tax savings from debt recycling
2:00 Debt recycling using cash
3:49 Debt recycling using equity
5:49 Debt recycling masterclass
#debtrecycling #investing #tax #ATO #asx

[@bodyboarding06]

Debt recycling is so beneficial. I’m surprised it’s not a more well-known strategy

[@kyle.edvest]

Indeed! I suspect it's under-utilised because it can seem a bit confusing, but with the right roadmap it's actually fairly easy to understand/implement.

[@Notabotalot]

Is it ok to just redraw and calculate the portion of interest relating to the redrawn amount for tax purposes?

[@kyle.edvest]

You can and you've still borrowed to invest and can deduct the portion of interest. However, you've created a mixed loan and the calculation of the portion doesn't remain fixed (assuming P&I), so it's an ongoing headache for you (and possibly your accountant).
I'd advise to structure separately initially. This will save yourself time, stress, and possibly errors in the future.

[@user-zl7ni3ue4l]

I recently bought Vanguard's VAS ETF. Should I sell it and use this strategy?

[@kyle.edvest]

Without knowing your situation (tax, cost base, VAS value, mortgage value) it's hard to say definitely however when working with customers it's often a consideration. You likely will have some capital gains tax to pay; however, the annual savings of debt recycling often will make up for the initial cost. One step backwards, 2 steps forward.
To see how much you'd save, download the debt recycling calculator on edvest.com.au
Just remember to avoid reinvesting in the same investment as doing a strategy for the sole purpose of tax savings is a no no. Fortunately there's plenty of quality alternate ETF's.

[@chetananand6217]

Bro, please make a video of an age group between 18-25 where these people invest their money? Like stocks, buy property or something else...

[@kyle.edvest]

Thanks for watching! It would really depend on your situation, but here are two of my past videos that may be relevant for 18-25 year olds:
1) Low-cost diversified ETF portfolios - czcams.com/video/eCeWkxwGglM/video.htmlfeature=shared
2) Best high-interest savings accounts - czcams.com/video/AIgzt-mmUXY/video.htmlfeature=shared
It's great that you're interested in investing while young. When you start early, the benefits of compound interest are on your side. Best of luck!

[@mattrt12]

It does not have to be your main residence does it, if you own an investment property with a mortgage can this not be the same process

[@kyle.edvest]

Thanks for the comment!
Debt recycling works by converting non-deductible debt into tax deductible debt. Since the mortgage on an investment property is almost certainly already tax deductible, there's nothing to convert and doing so would make your deductible debt level exactly the same. So debt recycling only works on non-deductible debt, which is almost always against the main residence.

[@Divyv520]

Hey Kyle , really nice video ! I was wondering if I could help you with more Quality Editing in your videos and also make a highly engaging Thumbnail and also help you with the overall youtube strategy and growth ! Pls let me know what do you think ?

[@A2Zvlogbd11]

Hi hope you are well, I visited your CZcams channel. Really nice video. I like it. i alrady subscribed. But your video SEO score is very low, Tags, descriptions, and titles are not perfect, If you want to grow your channel and increase your video views, and subscribe. then video SEO is very important. your channel will get organic traffic, increase subscribers & views for Monetization, videos go viral and your channel will go to the top rank on CZcams.
if you really want improve your channel then you should fixed below issues
1.vidio seo
2.titel
3. video tag
4. nice thumbnail
5.channel intro video
6.channel banner
7.full channel setup