Recycling debt is the conversion of ‘bad debt’ into ‘good debt’.
Bad debt is debt on which the interest is not tax deductible and it includes loans used to acquire the main residences. Good debt is debt on which the interest is tax deductible. This includes loans used to acquire rental properties and income producing shares. Where the interest on a loan is deductible it makes it so much easier to pay as the taxman is chipping in to help.