Hi all
My understanding is that when you borrow money to finance an investment property, the costs associated with the loan (LMI, loan setup costs, etc) are deductible over 5 years or the period of the loan whichever is shorter.
1. Is this correct?
2. Let's say I have $100 of loan costs which I am claiming over 5 years ($20 a year). After year 2, I have claimed $40 in my tax and have $60 left to claim. At the start of year 3, I refinance this loan with a new loan. Is the remaining $60 immediately deductible because the original loan has now ceased? Or does it still need to be claimed over the remaining 3 years? And are the costs of the new loan then deductible over 5 further years?
Many thanks
My understanding is that when you borrow money to finance an investment property, the costs associated with the loan (LMI, loan setup costs, etc) are deductible over 5 years or the period of the loan whichever is shorter.
1. Is this correct?
2. Let's say I have $100 of loan costs which I am claiming over 5 years ($20 a year). After year 2, I have claimed $40 in my tax and have $60 left to claim. At the start of year 3, I refinance this loan with a new loan. Is the remaining $60 immediately deductible because the original loan has now ceased? Or does it still need to be claimed over the remaining 3 years? And are the costs of the new loan then deductible over 5 further years?
Many thanks