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The addition to cost base of holiday house is also new to me. Thanks all for the light up :)

Thank you Alysha for the correction. :) I am hereby corrected. :o

Agreed. Interest on property expense is treated as operating expense, therefore, is claimable on the year it is incurred. Whereas interest on stamp duty (capital item) is treated as capital related, therefore, is claimable on sale of asset.

Stamp duty payment is a capitalised expense. If you use LOC to pay for its interest, you would need to separate the capitalised component from normal expenses when it comes to tax time. In other words, the LOC becomes "contaminated". Do you want to do this? :confused: