Conveyancing and loan fees

[Davimin]

Hi

Am I able to instruct my solicitor to take out their fees and any other loan fees from the IP loan account?
Ok, I can probably instruct them but will this taint any deductibility of loan interest as I assume the conveyancing costs are capital costs and not tax deductible. Loan fees deductible over 5 years?

Another thing, my IP loan has a annual professional package fee (Westpac). Broker did not tell me till I found out when signing loan docs. Anyaway, is this fee tax deductible. The package gives me benefits including a 0.90% discount on my IP rate.

Davimin

 

[Rolf Latham]

I will let the accountants cover the hard stuff

ALL interest generally is deductible on

BA fees, stamps, convey costs, gov duties. id guess most of the actual costs per se are capital and thus not deductible against income except the mortgage reg fee because its a borrow cost and the dedn can be spread over 5 years or the term of the loan if less

Ongoing costs like the Pro pack fee would be deductible against income...........but some would argue if there is a home loan and invest loan under the one package then one wold need to apportion the ded

seek personal advice Id say

ta
rolf

 

[Paul@PFI]

Hi

Am I able to instruct my solicitor to take out their fees and any other loan fees from the IP loan account?
Ok, I can probably instruct them but will this taint any deductibility of loan interest as I assume the conveyancing costs are capital costs and not tax deductible. Loan fees deductible over 5 years?

Another thing, my IP loan has a annual professional package fee (Westpac). Broker did not tell me till I found out when signing loan docs. Anyaway, is this fee tax deductible. The package gives me benefits including a 0.90% discount on my IP rate.

Davimin

Deductibility will be fine. These costs relate to the cost of acquisition or maintenance (Yes you can later draw funds to improve, repair or to pay ownership costs for the IP). Capital costs are exactly what you want to pay using the loan.

The package fee is a strange beast. The word package means you need to look at why you have it and what benefits you use. If you use it SOLELY for the cheaper IP interest etc and its only used for the IP then its 100% deductible when paid. If you pay a package fee and have a personal card and a PPOR loan + IP loan then apportionment is needed. The other borrowing costs you may incurred (LMI, val, bank fees or bank legals etc) may be deductible over 60months NOT 5 years as often stated on SS.

These q's indicate a reason why all new owners should consider a property focussed tax adviser.

 

[Davimin]

Thanks for the info.
The professional package only has the IP loan and credit card. Not that I wanted a CC but they gave it too me anyway, so I guess I'll use the black piece of plastic or plastics (Mastercard & Amex).
Mainly for the 0.90% discount and higher LVR than St George.