Getting back your LMI

[burty85]

I heard some where that you can claim back some or all of your LMI if your property rises in value within the first year enough to cover the 80% LVR the banks like you to have (some one correct me if im wrong).

If so has anyone done this and how did you go about doing it.

Thanks

 

[Brinkdude]

Hi

Unfortunately, not with your existing loan. If your IP has increased by enough to Re-finance and borrow under 80% LVR you can claim back some of the LMI (most in the first year of the loan - some in the second, - good luck).

You can also claim the entire LMI from your tax return (i.e you don't need to claim it over 5 years).

cheers

 

[Ausprop]

hi Brinkdude this 5 year exception for LMI is new to me - any clues what this is based on?

 

[JoyBoy]

hi Brinkdude this 5 year exception for LMI is new to me - any clues what this is based on?

I agree, I thought LMI was classified as borrowing costs, and therefore only deductible over 5 years or the life of the loan, whichever is lower?

 

[Mrman]

Also what if the LMI has been added onto the loan? How is it claimable if it has been borrowed? I'm guessing it's not?


George

 

[twobobsworth]

A friend with did this through CBA on his PPOR. Got a % of his LMI back, Can't remember the exact figures though.

 

[Ausprop]

Also what if the LMI has been added onto the loan? How is it claimable if it has been borrowed? I'm guessing it's not?


George

George you are confusing the balance sheet with the profit and loss... your source of funding does not alter the fact that you incurred the cost.

 

[Brinkdude]

ATO Rental Properties 2007 Guide

Hi Ausprop & Joyboy

The following information is from the ATO Rental Properties 2007 Guide (pg 14)

http://www.ato.gov.au/content/downloads/NAT1729_07.pdf

"If your total borrowing expenses are more than $100,
the deduction is spread over five years or the term of the
loan, whichever is less. If the total deductible borrowing
expenses are $100 or less, they are fully deductible in the
income year they are incurred. If you repay the loan early
and in less than five years, you can claim a deduction for the
balance of the borrowing expenses in the year of repayment."

Regards

 

[Ausprop]

oh I see - if you refi, yeh that's fine.