Deductions - LMI, stamp duty etc

[ndonnelly]

Hi All,

This may seem like a relatively simple question but would appreciate some clarification.

If an IP is purchased for say $100k and LMI, stamp duty, initial strata, water, council rates etc are all added to the loan balance then how are deductions claimed on these expenses if they technically have not actually been paid as they are now part of the loan?

Does the interest on this higher loan balance become claimable as a kind of offset? Or are the costs still claimable?

I woud have thought that only interest up to the point of the value of the property would be claimable.

Thx
Nick

 

[Terry_w]

Even if you have borrowed to pay expenses the expense it self will still be deductible (assuming normally deductible - which stamp duty isn't).

 

[Aaron_C]

Using borrowed funds to pay for expenses which are normally deductible is fine. It doesn't impact whether those expenses are deductible or not.

 

[ndonnelly]

Thanks people?.that pretty much answers my question
Further to my question, does this mean that even though the loan balance is >$100k the interest deductibility would only be calculated on the $100k portion and the interest on the >$100k would not be deductible.
Thx
Nick

 

[Doddzie]

I'd say interest on the lot mate, when you borrow to renovate you claim renovation cost and interest on the loan, same same

 

[Terry_w]

Thanks people?.that pretty much answers my question
Further to my question, does this mean that even though the loan balance is >$100k the interest deductibility would only be calculated on the $100k portion and the interest on the >$100k would not be deductible.
Thx
Nick

INterest on monies borrowed to pay expenses would generallybe deductibe