How do I ensure $44K 'bulding deposit' is tax deductible if settlement is in 1 year?

[johnthetechguy]

I am buying a 'pre-stage 1' property (off the plan) for which I need to outlay $44,000 as a deposit towards the building costs. I assume I want all costs towards the property to be tax deductible, including this $44K amount. I have already paid $4K by credit card, with $40K due.

How do I ensure that this amount is tax deductible?

Do I need to apply for a loan or line of credit before I pay the amount/s? If I pay the amount from my current funds or my credit card (the balance is due soon), is it too late to make it tax deductible if I get the loan in two weeks time, and 'pay back' the money to the account I paid it from?

(I currently have two other properties (home with large debt, investment with small debt) and I need to keep the home debt with my current lender (NAB), who is the provider of a very specific industry subsidised loan, with which other lenders would not be able to compete. Home loan brokers do not seem too interested in taking on my business, as they can't move my large loan, and would suffer on their commission.)

 

[Paul@PFI]

Tax deductibility requires :
1. You intend to earn assessable income in the immediate future when settlement is completed. (ie rent)
2. You incur interest and
3. The loan is clearly identified as being used to pay the expenditure. Your credit card item could be problematic. As cards often contain blended use and repayments it can be almost impossible to ascertain the longer term balance that is deductible. You cant just deem that $4k on the card is deductible. Every repayment has to reduce that to some degree. Credit cards are a VERY poor tax deductible. If you can quickly refinance the $4k that would be smart. Draw down $4k on a LOC for example then pay it direct to the card and its a refinance. Ideally the LOC should have a sub account that enables specific identification with the new IP v's any other property.

 

[Terry_w]

It is legally impossible to contract with yourself. So you cannot borrow from yourself or reimburse yourself.

You could borrow from a different person though...