How to finance deposit

[Moon91]

Hi

I am about to sign for a OTP apartment as IP. I have a LOC on my PPOR that I want to use to pay the deposit.

Final financing looks like will come from the same bank or refinance the all (PPOR and IP) at settlement date.

Is it he best approach and would it be possible to deduct interest (for the deposit portion only) in my tax return as the intend of use of the LOC draw is for an IP

Thank you

 

[Rolf Latham]

Hi

I am about to sign for a OTP apartment as IP. I have a LOC on my PPOR that I want to use to pay the deposit.

Final financing looks like will come from the same bank or refinance the all (PPOR and IP) at settlement date.

Is it he best approach and would it be possible to deduct interest (for the deposit portion only) in my tax return as the intend of use of the LOC draw is for an IP

Thank you

I would use a deposit bond for the deposit,until such time settlement comes

diff tax peops will tell you the 10 % deposit from LOC will not be deductible until the place is finished and rentable - pls seek specific advice

ta
rolf

 

[Moon91]

Hi

Thank you for your information.

For the bond deposit, I have asked if the developer is willing to accept it. I have read somewhere that it can be rejected as this is not "real money" but rather an insurance.

For the interest on the LOC, I have been told as well that there is 2 schools of tax accountant, some says it is tax deductible, others say no. I have checked with mine and he is from the "good" school, well for me at least.

I have ask the bank for the cost of the bond deposit. Do you know how much ( I guess in %) we are talking here?

Regards