Bank A and Bank B - can I use a combination for devt??

[INVSTOR]

I bought a rental property, took out a loan from Bank A for $100,000. I had heaps of equity in other properties so the bank gave me the title deeds.
Then I took out another loan from bank A for $20,000 for renovations. I didn't end up renovating, and sold property as is. When I sold I paid out most of the balance on both loans.

I have a devt block with Bank B. Can I redraw funds from Bank A to put towards building properties on devt block. Would the interest be tax dedutable?

 

[tobe]

yes, if there is sufficient equity and the bank lets you 'cash out' for that purpose,
and yes.
You should inform the mortgagor of any changes you are making to the property as per your loan documents, wherever you get the money for the changes from.

 

[Evachange]

I have a devt block with Bank B. Can I redraw funds from Bank A to put towards building properties on devt block. Would the interest be tax dedutable?

My understanding is yes the interest would be tax deductible as its the purpose of the funds that make the interest deductible or not.

Check with your accountant of course, but as the funds are being used to build income producing assets then the interest would tax deductible.

 

[INVSTOR]

tHANKS