Interest payments from 2 loans - can they be claimed as an expense

[Pamper]

Hi guys

I have a question with regard to what interest payments are deductible for an investment property.

I purchased my investment property utilising monies from “equity” I had available within my own home (ie. via a redraw facility) to pay 20% of the investment property purchase price plus all the monies required for stamp duty and other government charges.

The balance of monies (ie. 80% ) of the property value I then obtained through a separate investment loan taken out with the bank.

Am I able to claim all the interest I have payed (ie. from both these loans) as an expense for the investment property which would also include the monies for the stamp duty.

Appreciate any feedback

 

[Aaron_C]

Should be fine.

 

[Brady]

Not an accountant, so suggest speaking to one...

But

If you have redraw funds then you have reborrowed those funds, if those funds are for investment purposes then I would suggest they would be tax deductable.

Would recommend splitting these funds making it alot easier for your accountant and yourself.

Problem with a mix loan like that is the repayments are going towards which purpose???

Are you paying P&I on this loan?

 

[Terry_w]

You can claim both but it will not be easy in working out the deductible portion from The 20% part especially if this loan is pi or extra has been paid

 

[CHAOS]

Thanks OP - this has raised a question of my own.

If I have funds in redraw in my PPOR loan - can redraw them to pay a deposit on an IP - and the apportioned interest on that amount is tax deductible?

When my refi on another IP is complete and equity released - can I pay back that money taken from redraw?

 

[Brady]

Thanks OP - this has raised a question of my own.

If I have funds in redraw in my PPOR loan - can redraw them to pay a deposit on an IP - and the apportioned interest on that amount is tax deductible?

When my refi on another IP is complete and equity released - can I pay back that money taken from redraw?

Why not get the bank to split the loan to begin with to make it clear and simple for the accountant, ato and yourself

 

[Terry_w]

Thanks OP - this has raised a question of my own.

If I have funds in redraw in my PPOR loan - can redraw them to pay a deposit on an IP - and the apportioned interest on that amount is tax deductible?

When my refi on another IP is complete and equity released - can I pay back that money taken from redraw?

you can but you will be creating a mixed purpose loan which will make problems in the future.

 

[CHAOS]

you can but you will be creating a mixed purpose loan which will make problems in the future.

Thanks Terry - I thought that was the case but replies to the OP's question had me thinking it could be done.

Brady - yes agree. That is being done atm. In the meantime I actually found our next IP - too good to pass up.