Financing a renovation to IP

Discussion in 'Property Finance' started by Pugstar205, 17th Mar, 2015.

  1. Pugstar205

    Pugstar205 Member

    Joined:
    17th Dec, 2014
    Messages:
    1
    Location:
    Brisbane
    Hi,
    I have a LoC that I intend to draw on for a deposit on an investment property. However, I also need funds to undertake a renovation to the IP.
    I intend to claim the interest on the LoC in my tax return as the purpose is investing.
    If I were to use the LoC for the reno as well, can I claim the interest for that portion or would these funds be considered "private" use?
    Any advice on the best way to fund a Reno to maximise tax benefit is appreciated.
     
  2. Jess Peletier

    Jess Peletier Mortgage Broker, Perth

    Joined:
    23rd Apr, 2014
    Messages:
    518
    Location:
    Perth WA
    Doing a reno is a capital expense, so the interest on the borrowed funds should be claimable, however the reno's themselves are not.